New measures in Britain to uncover the real ownership of property and to make it easier for authorities to seize unexplained assets are a welcome advance in tackling the flood of dirty money associated with Vladimir Putin's cronies. But bolder steps will be needed if the British capital is to overcome its reputation as a safe haven for oligarchs and their ill-gotten gains that earned it the nickname Londongrad. Tens of billions of pounds of Russian money with dubious origins has flowed through Britain's financial system since the collapse of the Soviet Union. Oligarchs with ties to the Kremlin have been drawn to London not only for its capital markets but to invest in property, to buy art and to educate their children at expensive schools.
A lucrative cottage industry of lawyers, accountants and other professionals has formed in London to exploit every loophole for the super-rich and to protect them from scrutiny by the authorities and the media. The Economic Crime Bill introduced in parliament yesterday will create a register of foreign owners of property in Britain and will require anyone setting up, running, owning or controlling a company to verify their identity. Those who fail to reveal the beneficial owner would face restrictions in selling their property and up to five years in prison.
For four years, British authorities have had powers similar to those of the Criminal Assets Bureau through the use of Unexplained Wealth Orders (UWO) to seize property but since Boris Johnson came to power in 2019, not one such order has been issued. The new legislation aims to toughen up UWOs by giving law enforcement agencies more time to review material received in response to an order and protecting them from legal costs if the order is overturned.
The new measures will only be effective if Britain improves enforcement by properly resourcing the bodies charged with investigating who owns what. And Londongrad will continue to flourish until the lawyers, bankers, accountants and estate agents who feed off the oligarchs are also targeted.