Money can be laundered through various avenues - art acquisitions, yacht purchases, gambling, deposits in banks and with the recent Pandora Papers leak, it has revealed that UK properties worth in excess of £4 billion have been purchased through offshore shell companies that hide the owners' identities. These revelations have been reported by the BBC.
It is not only the UK where kleptocrats, criminals, sanctions evaders, and corrupt government officials use the real estate market to hide and launder proceeds from illicit activities. A report published by Global Financial Integrity on money laundering in the United States, found that more than US$2.3 billion was laundered through US real estate over a recent five-year period and that commercial real estate is involved in many of those transactions.
Owning real estate through an offshore firm is legal. However, it is important that estate agents and any other industry sector captured by the Money Laundering Regulations - know who they are transacting with including, determining the ultimate beneficial owners; and seek to answer the question of how and from where did the client get the money for this transaction?
This article was written by Annette Fong, who no longer works for Ince. For any advice in this regard, please contact Julie Dao.
"Using a shell company means that no one need ever know that the asset is yours," said anti-corruption activist Duncan Hames, Director of Policy at Transparency International. Hames also commented that, "Accepting bribes is illegal for a public official, and if you then invest the money you've received from those bribes and people help you do it, then they are facilitating money laundering. Money laundering is illegal."