Dark Money Investigations: News

UK is ‘top destination’ for Russians looking to hide dirty money in property

Former deputy prime minister sanctioned by EU among those who own multi-million-pound London properties

Adam Bychawski
25 February 2022, 5.34pm
£1.5bn worth of UK property is owned by Russian oligarchs or figures connected to the Kremlin.
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Chris Hepburn

The UK has become the ‘destination of choice’ for Russians looking to stash dirty money in property, MPs have warned.

At least 150 properties in the UK, worth £1.5bn, are owned by Russian businesspeople and officials who have been accused of corruption or having links to the Kremlin, according to Transparency International.

“Russians don’t come here for the weather, but instead for our lax regulation, pathetic law enforcement and a property market that is ripe for abuse. Something has got to change,” Labour MP Margaret Hodge, chair of the All-Party Parliamentary Group on Anti-Corruption, told openDemocracy.

“The government in its ‘massive’ package of sanctions should target the kleptocrats that Russian opposition leader Alexei Navalny alleges help prop up the Putin regime. Many of these individuals on Navalny’s list own prime property here in the UK and have bought their way into other institutions, like our football clubs,” she added.

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Among those on Navalny’s list are Chelsea football club owner Roman Abramovich, who owns £200m-worth of property in the UK.

On Thursday, the Labour MP Chris Bryant urged the government to seize the Russian billionaire’s assets, citing concerns about his alleged connections to corruption.

Other figures included in Transparency International’s report include Russian-born oil tycoon Viktor Fedotov, who was linked through a Russian firm to a massive corruption scheme, according to leaked documents seen by the Guardian last year. Lawyers for Fedotov denied any wrongdoing at the time.

Fedotov owns £25m-worth of property in the UK and has donated £1.5m to the Conservative Party through the entirely separate UK energy firm Aquind, which he also controls.

Of the £1.5bn in UK property identified by anti-corruption experts, more than £1bn is held by companies based in secrecy havens

Igor Shuvalov, a former Russian first deputy prime minister who owns an £11.4m apartment in London, was among those sanctioned by the European Union on Wednesday.

Shuvalov is now the chair of the Russian state development bank, VEB, which plays an important role in funding the country’s defence sector.

Of the £1.5bn in UK property identified by anti-corruption experts, more than £1bn is held by companies based in secrecy havens. The majority of these are UK Crown dependencies and overseas territories like the British Virgin islands and the Isle of Man.

Pat McFadden MP, Labour’s shadow chief secretary to the Treasury, told openDemocracy: “The government has dragged its feet for far too long on the Registration of Overseas Entities Bill – a register that would show the true nature of ownership of property and other assets in the UK.”

Anti-corruption experts have also accused Britain’s professional services industry, which includes lawyers and property firms that tailor their services to wealthy elites from former Soviet republics, of enabling corruption.

These professionals have helped oligarchs or officials linked to corrupt regimes hide more than £2bn of their wealth in the UK, according to a report by Chatham House published last year.

On Thursday, openDemocracy revealed that more than 600 apparently British companies set up in the last year were actually being controlled from Russia. The findings raise concerns that unaccountable British company structures are being used to prop up oligarchs linked to Putin.

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