The Home Affairs Select Committee has stated that the combination of “poor supervision and enforcement” in the London property investment market is creating a safe haven for laundering the proceeds of crime. As a result, the Committee is calling for much stronger supervision of agents, buyers and sellers. It also suggests that the key tool for detecting suspicious financial activity across the financial services sector and connected industries, such as real estate, is now overloaded to the point of being “completely ineffective”.
The Committee is calling for the creation of a specialist ‘Confiscation Court’ to combat the “current lack of interest and expertise” in confiscation orders among prosecutors and judges. It’s the Committee’s opinion that the Government should set up a dedicated, specialist court to hear complex cases featuring cross-border financial transactions, the use of corporate vehicles or very high value proceeds.
In 2013, the National Audit Office concluded that, at 26 pence in every £100, the amount of proceeds of crime actually confiscated is “paltry”. As at September 2015, the total debt outstanding from confiscation orders was calculated at £1.61 billion, although this figure is problematic. Nearly a third of it represents interest and penalties for non-payment.