NAEA response to consultation on Beneficial Ownership Transparency

Tuesday 05 April 2016

The BIS consultation on Beneficial Ownership Transparency aimed at preventing corruption in the UK has now closed. We said that the current system makes it extremely difficult for Estate Agents to determine the beneficial owner when a property is owner by a foreign trust or corporate entity and gave our reasoning for implementation of the new register.

The idea behind the consultation is to establish a publicly available central registry showing who really owns and controls UK companies with the aim of tackling corruption, money laundering and terrorist financing by exposing the people behind the façades and bringing them to justice.   

If enacted, this would help to uncover investments in the UK that hide the proceeds of illegal activity such as money laundering, bribery and embezzlement.

A summary of some of our key points to the consultation is given below:

Should foreign companies have to provide beneficial ownership information?

  • Foreign companies should provide beneficial ownership information when buying land or property in the UK

How should this information be held?

  • This information must be publicly available from the Land Registry including indicators to distinguish between residential and commercial property. 
  • A more integrated approach to due diligence which should include financial institutions, solicitors and estate agents working together to gather and share information. 

Where are how should information be stored?

  • Beneficial ownership information should be held on a public register regardless of whether the information is already available elsewhere. 
  • Consolidating the number of anti-money laundering supervisors

What information should foreign companies be asked for?

  • Full disclosure should include: who the beneficial owner is, the ownership structure and what their relationship is to the client. 
  • Foreign companies should also be asked where the money is coming from to complete a property transaction, and what the wider plan is for investing. 

Should foreign companies be required to provide BOI if they already old property in England/Wales?

  • Yes. It'll improve transparency and remove secrecy of existing property held in tax havens
  • Should also Improve standards of compliance with existing regulation such as improving the levels of SARs reporting. 
  • Introduce a 'fit and proper' test for agents registering with HMRC for money-laundering regulations.

Devolved Administrations

  • Work with Devolved Administrations to ensure a singular approach across the UK

Costs and benefits

  • Beneficial ownership transparency should help improve the reputation of our industry as whole
  • Two levels of SARs reporting should be introduced - one for priority case and one for non-priority

Enforcement

  • Penalties for foreign companies who do not keep their information up to date on the beneficial ownership register
  • More prosecutions and enforcement for agents found to have broken the law
  • HMRC should be able to ring fence money obtained from non-compliance for enforcement

Sanctions

  • Foreign companies should have to register with the British embassy in the country they are from in order to make it easier for government agencies and the NCA to work across borders
  • Education and training as well as fines should be included in sanctions

Developing Countries

  • Developing countries should also have public registers that are accessible and their needs to be cooperation with UK investigatory organisations

Foreign governments

  • Foreign governments must provide information that mirrors that of the UK

>> VIEW OUR FULL RESPONSE <<

If you have any questions about our response, please contact NAEA's Policy and Campaigns Officer Tim Douglas: timdouglas@naea.co.uk