Theresa May urged to up scrutiny of wealthy foreign investors

‘Panama papers’ reveal UK role in global corruption – Transparency International report

By Mike Yuille | 7 April 2016

Theresa May urged to up scrutiny of wealthy foreign investors

“The Panama papers have confirmed that the UK is a prime location for corrupt individuals who are looking to hide their illicit wealth.” – Rachel Davies, Transparency International

Home secretary Theresa May is being urged to introduce “full transparency” over rich foreigners who are fast-tracked for UK visas in return for investment.

Transparency International UK (TI-UK), the anti-corruption organisation, says that the Home Office should make public disclosures of who is investing, how much and what in, as well as their financial interests and assets for those eligible for “Tier 1 (Investor) visas”.

The more they invest, the quicker they can secure residency rights in the UK.

Rachel Davies, head of UK advocacy and research at TI-UK, said that the huge leak to the German newspaper, Sueddeutsche Zeitung, of material from the Panama-based law firm, Mossack Fonseca, exposed the UK’s “role in global corruption”. She said: “The Panama papers have confirmed that the UK is a prime location for corrupt individuals who are looking to hide their illicit wealth.”

The group makes a series of recommendations in a report on how to end the UK’s “role as a safe haven for corrupt money”, including greater transparency over wealthy foreign investors in the country.

Davies said that the system is open to abuse. “If corrupt individuals are allowed to continue to buy up luxury property and enjoy life in the UK, then the government risks its credibility in leading efforts to tackle corruption on the global stage,” she said.

The TI-UK report, ‘Paradise Lost’, says: “Upfront declarations should be required for politically exposed persons and public officials who should expect to meet a high level of transparency, even after they have left office.

“Retrospective checks should be undertaken on historical Tier 1 (investor) visas for visas granted in the ‘blind faith’ period and consideration given to publishing their details.”

The report also makes recommendations specifically on tightening up UK rules to tackle money laundering. It comes after Exaro revealed in November how ministers are under pressure to set up a national UK agency to fight money laundering to replace a patchwork of 27 bodies that currently supervise the reporting by accountants, lawyers and other professions of suspicious transactions.

TI-UK’s report today urges the government to “overhaul the supervisory regime for the UK’s anti-money laundering (AML) rules, notably for professional enablers”.

“The UK government should consolidate the patchwork of AML supervisors and consider introducing a single ‘super-supervisor’.”

The report continues: “The government should establish more effective administrative sanctions on professional enablers by encouraging professional bodies to withdraw professional licences from those implicated in such cases, in addition to prosecuting those who are personally involved.”

TI-UK also says that its research shows that 36,000 properties in London are owned by offshore companies.

Four years ago, Exaro revealed how thousands of multi-million pound homes worth around £25 billion are held through offshore and other corporate structures that allowed owners to avoid UK taxes.

Today’s report says: “The UK is a prime destination for corrupt individuals looking to invest or launder the proceeds of their illicit wealth, enjoy a luxury lifestyle and cleanse their reputations.”

“With the help of defamation lawyers and PR experts, they can start their life afresh, and embed their children in society’s elite through exclusive education and mixing in the right social groups.”

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