UK fines 123 offshore companies for transparency law breach

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Britain has issued more than 120 financial penalties to offshore companies that have failed to comply with transparency legislation designed to uncover illicit wealth hidden in the UK property market.

The Register of Overseas Entities was created after Russia’s invasion of Ukraine to help the UK government crack down on oligarchs and other kleptocrats.

Individuals that own British property through offshore vehicles had until the end of January 2023 to register such entities and publicly reveal their ownership at Companies House.

Fines for failing to register could be up to £2,500 a day on top of a penalty of between £10,000 and £50,000 per property.

In May no fines had been issued to the more than 5,000 companies that had failed to comply, according to a BBC report at the time.

Previously unreported Companies House data now shows that 123 penalties have been issued to entities for failing to register.

Ben Cowdock, lead investigator at campaign group Transparency International, said: “It’s good to see that [the government] are finally starting to take more action . . . these will be 123 cases where they’ve been able to nail active non-compliance.”

He added that the real challenge will be ensuring that the fines are paid.

The fines mark the first financial penalties taken by the government to enforce the UK’s offshore transparency legislation introduced in 2022.

The first fine was issued on July 1, Companies House said, six months after the deadline for compliance and 11 months after the register was implemented in August 2022.

Some 4,772 penalty warning notices have been sent to the 3,103 entities that are yet to comply. Companies House has said some of the 3,103 entities may no longer exist.

As of September financial penalties worth about £660,000 had been issued, according to the Department for Business and Trade’s response to a parliamentary question that month.

If a penalty is not paid within 28 days, the Companies House website warns that: “The registrar may seek to enforce the debt through the courts. This may result in a charge being placed on the entity’s property”. Companies House declined to comment.

Transparency International also pointed to “obvious non-compliant filings”, referring to companies with opaque ownership structures that had been listed as beneficial owners on the register.

Research by the London School of Economics and Warwick university released in early September found that for 71 per cent of properties on the register, essential information about their beneficial owners was missing or publicly inaccessible.