Laws designed to curb money laundering full of loopholes

LAWS aimed at cracking down on money laundering are “unenforceable” and have too many loopholes, MPS and peers have warned.

Ministers have drawn up legislation to establish a publicly accessible register of overseas companies and individuals who own property in the UK.

Its aim is to expose foreign criminals using the property market to launder money, creating a “hostile environment” for them.

David Cameron first announced plans to introduce the public register in 2016 during an anti-corruption summit he hosted as prime minister.

However, a committee of MPS and peers set up to examine the Draft Registration of Overseas Entities Bill said the legislation does not have “teeth”.

Lord Faulks, chairman of the committee, said: “The legislation is well drafted but there are some loopholes in the draft Bill which, if unaddressed, could jeopardise the effectiveness of this important piece of legislation.

“Time is of the essence, the Government must get on with improving this Bill and making it law.”

Between 2004 and 2015, £180million worth of property in the UK was subject to criminal investigation as the suspected proceeds of corruption. In 2017 alone, 160 properties worth more than £4billion were identified as having been purchased by “high corruption-risk individuals”.

However, such inquiries are frequently hampered because enforcement agencies cannot access information about their anonymous foreign owners, the committee said.

It suggested that civil penalties could prove to be more effective.