High corruption-risk individuals purchased 160 properties with a joint value of over £4bn in 2017, while 86,000 properties in England and Wales have been identified as owned by companies incorporated in secrecy jurisdictions, the Joint Committee revealed.

Further to this, between 2004 and 2015, £180m of UK property was subject to criminal investigation as suspected proceeds of corruption, which the Joint Committee said “may be just the tip of the iceberg”.

The government pledged to introduce a transparent register of the foreign entities that own UK properties, and the individuals that actually control them, three years ago and the committee has called for action, arguing that the draft Registration f Overseas Entities Bill is urgently needed.

“Time is of the essence and regardless of the effect of Brexit on the parliamentary timetable, this legislation is needed now,” the Joint Committee said in a statement.

The Serious Fraud Office (SFO) has recently pledged to speed up investigation into fraud and corruption and, with an effective register of overseas entities, the committee said the UK has a “real chance to add another tool to the UK’s anti-money laundering toolbox”.

The Joint Committee has highlighted five key concerns. The first is that the bill does not cover trusts and, since the government plans to ensure that trusts are transparent, has suggested that the Fifth EU Anti-Money Laundering Directive must be introduced at the same time as this draft bill.

Secondly, the bill allows the government to exempt certain entities from publishing their information, and in some cases from disclosing it at all. The Joint Committee has urged government to be more specific and make it clear in the legislation exactly which entities can be exempt.

Its third concern surrounds out-of-date information, with the committee arguing that the register is not for purpose. Vendors of property should update their ownership information once a year, but also update information about proposed transactions before they take place.

Furthermore, in its fourth concern, the committee explained that the current proposals lack verification checks to deter individuals, including criminals, who want to submit false information. Without such checks, the draft bill risks failing to achieve its primary aim of increasing transparency about who really owns land.

The final concern, enforcement, details the committee’s worry that the law may be difficult to impose. The report therefore suggests that civil penalties will be easier than criminal sanctions to enforce abroad, and against land or other assets in the UK.

Commenting on the Draft Registration of Overseas Entities Bill, Joint Committee chairman Lord Edward Faulks QC said: “We welcome this much-needed legislation as one of the vital tools required to create a hostile environment for money launderers who want to use the UK property market to hide unlawful funds. The legislation is well drafted, but there are still some loopholes in the draft Bill which, if unaddressed, could jeopardise the effectiveness of this important piece of legislation.

“In the current political climate, anti-money laundering may not seem an immediate priority. But the evidence we took shows there’s a huge problem, and it’s not going away. Time is of the essence: the Government must get on with improving this Bill and making it law.”

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