Property register fines of £1 billion not yet enforced

London skyline

Analysis by the BBC reveals that the UK has not yet imposed fines of up to £1 billion on foreign companies for violating a landmark transparency law. The law, introduced in February 2022 as part of the Economic Crime Act, requires overseas firms owning UK property to declare their owners on the property register or face daily fines of up to £2,500.

Despite the threat of fines, thousands of firms, including those linked to prominent figures like Roman Abramovich and Oleg Deripaska, still need to comply with the law. The government suggests that some firms may need to be made aware of the new legislation or that they struggle to identify their beneficial owners. However, some companies may be intentionally avoiding compliance, either out of ignorance or to take the risk of potential fines and property confiscation.

While the government is currently building cases against non-compliant companies, no financial penalties have yet been issued. The Department for Business and Trade emphasises working with law enforcement to prioritise action against the most egregious offenders. The government says it views these fines as a necessary tool to crack down on money laundering through property, with non-compliant companies already barred from buying or selling unregistered land.

However, determining property ownership is a challenge, especially when dealing with properties owned by oligarchs and individuals with links to sanctioned individuals like Vladimir Putin. Recently, further sanctions were announced against those assisting sanctioned Russians in hiding their assets. Oligarchs have reportedly used various financial mechanisms, offshore trusts, and shell companies to shield their wealth.

A significant number of UK properties owned by foreign companies, around 50,000, are still hidden from public view despite the new transparency laws. The effectiveness of the property register in retroactively addressing a system that has overlooked property ownership for three decades remains limited, according to experts in economic crime.