What does a public register of corporate-owned properties held in the UK hope to achieve?
A new range of proposals has been drafted to create transparency for corporate ownership of UK property in England and Wales (with Scotland legislating something similar in its recent land reform bill). The plan is to create a public Register of Beneficial Ownership.
The Register of Beneficial Ownership proposal
Property can provide a convenient vehicle for money laundering. Between 2004 and 2014, £180 million worth of property in the UK was investigated, suspected of being the proceeds of corruption. In London, more than 44,000 properties are owned by foreign companies, but the information concerning which companies own these properties is not always clear. The UK government is considering a regime whereby foreign companies do not need to provide their Beneficial Ownership information to a public register in the UK providing that the information is already available on a register in their state of incorporation.
Under the proposals, all companies would be required to provide to the UK authorities the registration number they use on the register held in their own country of incorporation. The UK government proposes requiring foreign companies to provide information on their Beneficial Ownership before they are able to buy land/property in England or Wales; or for that matter, enter into public procurement contracts in England.
Who will hold and manage the information and level of disclosure?
There are a number of options being discussed about where this information could be held and managed. However, in order for the information to have any useful relevance, the following are seen as essential, the information held should be:
- Easily accessible to law enforcement and investigatory organisations;
- It should be made easy for foreign companies to provide the information, access their records, and update it;
- It should be compatible with other registries for which the information will be used, for example the UK Land Registry
- It should be subjected to a level of quality assurance to the information being received;
- Operate on a cost recovery basis.
One option put forward is for the information to be held and managed by Companies House alongside the UK PSC Register. Alternatively, the new Register could be operated by another independent public body, or by a private sector organisation. Under all these options, a foreign company on the register would be provided with a unique identifier number, which would enable it to purchase land/property in England or Wales or help facilitate its participation in public contracting in England. There is no confirmation yet about what measures will be taken to preserve the privacy of individuals whose security and privacy could be put at risk.
The obvious place to hold this information on Beneficial Ownership would be at the Land Registry and Companies House. However, as some companies hold property under extremely complex and opaque conglomerations, making the opaque more transparent, surely, is where effort should be focussed to reveal actual ownership of companies wherever they are. The government cannot do this until it has sorted out the off shore havens that the Panama Papers revealed; these are operated and used widely be all sorts of individuals and "companies", some in order to deliberately conceal their assets.