Activists question UK government’s ability to identify assets of oligarchs | Immovable

The UK government’s ability to investigate the true ownership of properties has been called into question after researchers found that £700m of luxury homes previously linked to sanctioned oligarchs are not being flagged for asset freezes.

Campaign group Transparency International UK has identified 33 houses, flats and office buildings in London or Surrey that are not marked as restricted on the UK property register, which it says have been publicly linked to sanctioned individuals , raising the question of whether they should have been reported.

The properties in question include Witanhurst, a £50million home in Hampstead believed to be London’s second largest home after Buckingham Palace, and other valuable homes previously linked to the former owner of Chelsea football club Roman Abramovich and aluminum billionaire Oleg Deripaska.

Three are directly owned by people whose names match those designated for sanctions. A £31million house in Holland Park has an owner listed as Vladimir Evtushenkov, the biggest shareholder in Russian IT company Sistema, and two flats in exclusive areas of Hampstead and Westminster have owners listed as Yuri Soloviev, a influential banker.

Soloviev was chairman of the board of VTB, a bank believed to have close ties to the Russian government, although the bank has since said he quit the board the day Ukraine was invaded. began. Soloviev and VTB did not respond to requests for comment. Evtushenkov and Sistema declined to comment.

The sanctioned oligarchs are barred by law from selling property without explicit permission under an asset freeze that allows transactions only for the necessities of life, such as utility bills and food. Land registry title restriction notices warn potential buyers, real estate agents and attorneys that the property can only be sold with the express permission of the Office of Financial Sanctions Implementation (OFSI), which enforces British sanctions.

There are 106 properties under sanctions restrictions, 92 of which have been added since Russia launched its invasion on February 24, the land registry said.

Britain used financial retaliation as one of its main responses to the Vladimir Putin regime’s invasion of Ukraine. The government said it hoped to impose a “significant and lasting cost on Putin and those close to him”.

Transparency International’s findings will raise questions about the impact of financial sanctions and the ability of UK authorities to determine the true owner of some of the country’s most important addresses. Many of those not marked as restricted belong to opaque shell companies but have been linked in previous reports to oligarchs, according to leaked documents.

These properties include:

  • The £90million house on Kensington Palace Gardens, which has been repeatedly reported as belonging to Abramovich. The land register lists the owner as A. Corp Trustee Ltd, a Cypriot company which has given a business at Chelsea Stadium as its service address.

  • Hamstone House, a £7million art deco Surrey mansion in the gated estate of St George’s Hill which has been linked to Deripaska. The property is owned by Edenfield Investments, a company incorporated in Cyprus.

  • Witanhurst, is said to have been linked via a series of companies to chemical magnate Andrey Guryev. The property is held through Boradge Ltd, incorporated in the British Virgin Islands.

Deripaska denied owning Hamstone House when approached by the Guardian. His spokesman denied he was related to Putin and said the property belonged to a relative. Guryev’s London-based lawyers said: “Mr Guryev does not own Witanhurst”, without providing further details. Guryev’s spokesperson previously told The New Yorker that he was a beneficiary of a trust that owns the property but not the legal owner.

Abramovich did not respond to a request for comment. He has previously not commented on reports about his properties, but denied any connection to the Kremlin.

The research highlights the continued role of offshore secrecy jurisdictions in obscuring the true owners of properties.

Financial transparency experts say it is reasonable for authorities to review properties controlled by family members or close associates of sanctioned individuals, as they may in some cases be held on behalf of another nobody. Under UK government guidelines, the asset freeze can apply even if the property is held in another person’s name, if it is reasonable to believe that the named person has direct or indirect control of it.

Margaret Hodge, a Labor MP who has campaigned to improve the UK’s transparency laws, said: “These important findings demonstrate that there could be glaring flaws in our sanctions regime resulting from a complete lack of transparency in much of our financial world, especially our property. market.

“If sanctioning Russian companies and individuals is to have any hope of crippling the Russian economy, then the new government must review the way our sanctions are applied. Then the next step must be to urgently consider how we can move from seizing the wealth and assets of the oligarchs to supporting the war effort in Ukraine, instead of just freezing them.

Land registry title restriction notices act as a first line of defense to prevent the sale of properties by persons subject to asset freeze sanctions, although lawyers and real estate agents are also required by law to verify themselves whether buyers and sellers are liable to sanctions.

The notices typically use identical text stating that sellers require “the written consent of the Office of Financial Sanctions Implementation.”

HM Land Registry (HMLR) said some properties would not be marked as restricted because there was insufficient proof of ownership, particularly if they were owned by anonymous trusts. In some cases, public reporting of ownership of a property has been incorrect, she added.

“HMLR has no investigative powers and must rely on other sources of evidence to determine whether a name match to a sanctioned person can provide sufficient evidence that it also belongs to that person,” said a spokesperson. Proof of ownership may be “very difficult to obtain, if at all”.

Ben Cowdock, Head of Investigations at Transparency International UK, said: “Sanctions will only achieve their objectives if they are effectively enforced, which depends on active compliance with the law by the private sector.

“It is essential that companies inform the authorities if they identify assets belonging to sanctioned persons and indicate where properties subject to these restrictions must not be for sale. Failure to do so creates an information black hole, which increases the risk of sanctions evasion.

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