01/04/22

UK: UWOs not being used in fight against dirty money, says Labour.

As published on propertyinvestortoday.co.uk, Friday 1 April, 2022.

The most recent Mayor's Question Time meeting revealed that there have been no Unexplained Wealth Orders (UWOs) secured to stem the tide of 'dirty money flowing through' the London property market since 2019.

This was confirmed by the Mayor of London, Sadiq Khan, following questioning from Labour's London Assembly Police and Crime Spokesperson, Unmesh Desai, at the meeting on March 24.

Desai is urging, through his new ‘Clean Up the City’ campaign, the government to properly fund crime and fraud agencies and introduce a register of all overseas property ownership to clamp down on money laundering.

It's estimated by Transparency International that £1.1 billion worth of property in the capital is owned by people of concern, with UWOs supposed to be there to tackle the flow of huge sums of ill-gotten money being laundered all over the UK. Investigators ask that suspects with assets of more than £50,000 explain how they can afford them if their income appears insufficient.

Desai said during Mayor's Question Time that politicians 'fraternising with oligarchs' had gone on for too long. He called for extra police and crime funding as he launched a campaign to address the 'long-overdue process' of cleaning up, not just his own constituency (City and East), but the whole of London.

Responding to Desai, the Mayor concurred that 'much more needs to be done' when it comes to tackling money laundering by oligarchs with connections to Russian leader Vladimir Putinand seizing their property, as 'too many loopholes remain'. Khan said that the Metropolitan Police are working closely with the National Crime Agency (NCA) and the Serious Fraud Office (SFO), but it’s not a 'level playing field'. For the agencies to work effectively, they desperately need a 'major funding boost' from the government, he said.

According to government research, UWOs have been available since January 2018, but they have only been secured nine times in relation to four cases. The High Court rescinded them in one case, and none have been secured since the end of 2019. While several agencies, including HM Revenues & Custom and the SFO, can use them, it's only the NCA that has served any so far.

The set-up in the UK - where the 'loser pays the costs' - means the party defeated in the legal process pays the costs of the other side, amounting to high financial risk for cash-strapped law enforcement agencies. With oligarchs having the financial clout to circumvent any legal proceedings, the government is reportedly looking at reforming the process through the new, fast-tracked Economic Crime Bill.

“Let’s be clear, London can no longer be a laundromat where corrupt oligarchs with dubious links can freely stash their cash," Desai, a Labour member of the London Assembly since 2016 and before that a councillor on the London Borough of Newham since 1998, said.

“The government has to act to sanction bogus business that has, for too long, dragged London down into the mire with shady operators and dodgy dealings."

He added: “Through my ‘Clean up the City’ campaign, I am calling for proper funding of crime and fraud agencies and a register of all overseas property ownership to clamp down on money laundering."