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Who’s in your backyard? Looking at anonymous companies and their ownership of London Property

March 4th, 2015

UKUnmask

Do you know who owns the house behind yours? What about the one down the street, or that mansion in the nice part of town?

When anonymous companies are involved, you can’t just walk up and ring the door bell, which makes it tough to find out who really owns a house or property. We’ve seen anonymous companies come up in property ownership time after time, from former Ukrainian President Vktor Yanukovych’s mansion to Iran’s secret ownership of a Manhattan skyscraper. Now, Transparency International has released a new report looking at this very question, and set off to uncover just how many properties around London are owned by anonymous companies in secrecy jurisdictions or tax havens.

Some of the results are pretty staggering. The findings, which pulled data from the UK Land Registry and the London Metropolitan Police Proceeds of Corruption Unit, found that 75% of properties whose owners are under investigation for corruption used offshore secrecy jurisdictions to hide their identities. This isn’t really a surprise when you look at how easily you can hide your identity via an anonymous company. In jurisdictions all over the world, from the British Virgin Islands to Delaware, it’s quite easy to set up a company without having to provide any information on who is the beneficial owner (the real person behind a company). In Delaware, for instance, you need to provide more information to obtain a library card than to start a company.

Almost one in ten properties in the City of Westminster are registered to companies in offshore secrecy jurisdictions, according to the new TI report. In Kensington and Chelsea, the number is about 7.3%. An amazing 36,342 properties in London are held by companies based in offshore jurisdictions. Leading the way is the time honored friend of secrecy, the British Virgin Islands, which accounts for 38% of the total number of properties.

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Alongside this report, Transparency International has launched an interactive microsite that allows you to visualize the data to truly understand the scope and breadth of the numbers. But this report, and similar reporting in a New York Times series on anonymous company ownership of properties in the United States beg a larger question: why are anonymous companies a thing?

There are countless reasons anonymous companies are controversial. They help politicians and the wealthy elite embezzle funds, they help arms dealers hide their identity, and aid corporations in tax evasion. They also contribute to the almost $1 trillion that leaves developing countries every single year in illicit financial flows. But the arguments as to why anonymous companies should exist are conspicuously absent.

Business mogul Mo Ibrahim said it best during the US-Africa Summit:

“there’s absolutely no good reason for someone to have an anonymous company”

That’s why we’re advocating for public registers of the beneficial owners of companies throughout the world. Fortunately, we’re seeing some movement in this direction. The U.K. has begun the process to create public registers of all companies incorporated there, and the EU recently finalized legislation within the European Anti-Money Laundering Directive that will create national-level registers of beneficial ownership information that will be accessible to authorities. The information, however, will only be available to journalists, NGOs or members of the public if they can prove a “legitimate interest” in obtaining the information.

But even with these movements, there is still a lot of work to be done. Secrecy jurisdictions, where company ownership information isn’t even collected, remain alive and well. From Delaware to Kenya, recently dubbed the easiest place in the world to start an anonymous company, those looking to steal, evade taxes and break the law have a number of havens to choose from. As more and more jurisdictions embrace financial transparency, the secrecy jurisdictions where illicit flows can hide will hopefully decrease as a result.

 

Written by Christian Freymeyer

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