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Starmer: Russians are hiding money in UK ‘soft touch’ | Russia

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The ‘creeping tendrils of the Kremlin’ have been allowed to wrap around the UK and turn London into a money laundering capital of the world, Keir Starmer has said, as he accused successive Tory governments of failing to acted in the face of the threat.

In a virulent attack on the government’s stance on Russian influence within Britain, the Labor leader said the UK needed to get its own “house in order” as it struggles unites with the West to confront Vladimir Putin.

The warning comes as new figures obtained by the Observer show that almost 30,000 properties in England and Wales, including mansions belonging to the Russian elite, are registered with companies and individuals based in the British Virgin Islands (BVI). Most of the owners are unknown after delays in a government commitment to end secret offshore ownership of the property.

Write in the Observer, Starmer says greater transparency, stronger counter-intelligence measures and new anti-corruption laws are needed to tackle money laundering in the UK. He said Putin deployed illicit money and influence “like a judo move that turns the openness and freedom of Western democracies into weaknesses.”

“For nearly 12 years of Conservative government, the creeping tendrils of the Kremlin have been allowed to coil around the UK,” he wrote. “A cottage industry has been created that directly and indirectly responds to the bidding of those linked to Putin.”

He said a new report by anti-corruption organization Transparency International revealed how £1.5billion of British assets had been scooped up by Russians accused of corruption or linked to the Kremlin. “They don’t buy here for the weather: they see us as a soft touch, where they can hide money with few questions asked,” he wrote.

Russians linked to Vladimir Putin’s Kremlin have bought £1.5 billion worth of goods in the UK. Photography: Sputnik/AFP/Getty Images

New figures in a separate analysis obtained by the Observer show that the BVI is a low tax offshore jurisdiction for companies and individuals with property in the UK.

Analysis by the Center for Public Data, a British non-profit organisation, of the most recent ownership data reveals that 21,496 title deeds in England and Wales are registered with BVI businesses and 7,898 others are registered with individuals.

The BVIs do not disclose company owners and many of the people who hold title deeds are agents acting for offshore trusts. Experts have established that a number of these properties, including some of the most expensive homes in the country, are linked to Russian billionaires.

Anna Powell-Smith, Director of the Center for Public Data, said: “These figures show the extraordinary role the BVI plays in the UK property market.

“It has been more than five years since the government promised to clean up the UK property market by publishing the real owners of secret offshore companies. Legislation is ready, but progress has stalled.

The BVI has pledged to introduce a public register of business ownership by next year, but exact details are yet to be confirmed after officials said certain people should still have privacy rights. It was reported by the publication EUobserver this month that the BVIs should be added this week by the EU to a “grey list” of tax havens.

Ministers are coming under increasing pressure as lax anti-corruption measures have let suspected illicit funds into Britain. the Observer reported last month that the government was being asked to suspend its Tier 1 investor visa program, the “golden visa”, over fears that the super-rich in Russia and other countries had been fast-tracked for residency in the UK without proper checks.

Home Secretary Priti Patel announced last week that the scheme was being scrapped with immediate effect as part of a “renewed crackdown on illicit finance and fraud”.

The Tier 1 Investor Visa scheme allowed people with at least £2 million in investment funds and a UK bank account to apply for residency rights. The speed of their application for indefinite leave was dictated by the amount of money they needed to invest. In the year to September 2021, 798 investor visas were issued, 82 of them to Russians.

David Davis, the former cabinet minister, said: “I think we have at least 700 Russian multi-millionaires in the country. We have been too cowardly. Regarding the golden visas, he added: “It seems to me that the next natural step is to review all those who have already been granted with a view to ensuring that the source of the wealth that allowed them to come here is acceptable to The United Kingdom.”

Ministers say they will implement a package of measures to help tackle financial crime. A government spokesperson said: “The government will establish a new register of beneficial owners of overseas entities that own property in the UK, in order to combat money laundering and achieve greater transparency on the UK property market.”