A poorly kept secret among those in the know, the Guardian has finally decided to expose the London property boom based on massive money laundering of dirty money from abroad for everyone to see.
The Guardian investigation revealed that more than 36,000 properties were bought in London area with hidden ownership and offshore structure companies, making this a haven for “billions of pounds” of ill gotten funds to be safely stashed in real assets.
The “how-to” sidebar describes a “corrupt official” who steals £30,000,000 from Russian taxpayers, layering the funds through a series of offshore and secretive jurisdictions using nominee shareholders and directors finally purchasing of one or more properties in London using an offshore company structure.
Aside from driving up prices in London with a subsequent adverse effect on honest buyers on the area, the lack of due diligence is allowing and encouraging corrupt behaviour by foreign officials and corrupt individuals in foreign countries with the obvious negative effect on the populations of those countries who often are in desperate need of infrastructure improvements and social services.
As long as the influx continues as it has in the past few years, there seems to no will in the UK to change the system, which only requires estate agents to conduct KYC due diligence on the sellers, leaving the buyer to be any corrupt official with cash to hide.
As a result, over 60% of the company owned properties in London are held by opaque offshore companies, mostly in the British Virgin Islands, Jersey, Guernsey and the Isle of Man.
Detective Chief Jon Benton, director of operations at the Proceeds of Corruption Unit, says,
In nearly all the grand corruption cases we investigate, we find – what we suspect is – proceeds of corruption being used to purchase high-value properties.
Even if KYC due diligence is not required on the current buyers, estate agents should already employ a robust KYC process in order to protect themselves today. And when these shady buyers become sellers, we can anticipate some very serious due diligence problems to arise.
Estate agents would be wise to stay ahead of the curve and have an appropriate KYC process and tools in place before this happens.
Original article at The Guardian: London property boom built on dirty money
KYC3 - Know Your Customer, Counterpaty and Competitor 
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