Prime Minister David Cameron pledged on Thursday to set up a public register to show who owns properties in Britain, in an effort to stop stolen funds being laundered through London’s property market.
Cameron made the announcement at the start of a global anti-corruption summit he is hosting in London, but critics said the proposed register may not be enough to make a meaningful impact on the scourge of graft.
The build-up to the event was marred by Cameron being caught on camera describing Nigeria and Afghanistan, which are both taking part, as “fantastically corrupt”, but he later said that the leaders of both countries were tackling the problem.
“We are making some real progress at this summit,” Cameron told a plenary session to open the event.
“Crucially, there are country-by-country commitments … to tackle the issues of corruption that people will be able to check up on and report back on,” he said.
Cameron put tackling corruption, including tax avoidance, at the heart of his agenda when he hosted a summit of the Group of Eight leading industrialised democracies in 2013.
He has sought to present the summit, which brings together leaders such as US Secretary of State John Kerry and a deputy foreign minister from Russia, as a milestone in that campaign.
Under the new arrangement announced on Thursday, any foreign company that wants to buy property in Britain or bid for a central government contract would have to join the new register of beneficial ownership.
The register, which London said would be the first of its kind in the world, will include companies that already own property in Britain, not just those wishing to buy.
The aim is to expose individuals who hide behind shell companies with obscure names to own properties, a particularly acute problem in London’s luxury real estate sector.
The capital has been hit by repeated scandals involving luxury homes owned by corrupt politicians from countries such as Nigeria or Libya.
The release of the “Panama Papers”, leaked documents from Panama-based law firm Mossack Fonseca that named many British businessmen and politicians among the list of clients, put tax avoidance at the top of the global agenda.
Some critics said they doubted that Britain’s new register would make much impact unless overseas tax havens cooperated by also making public the names of those who own companies.
“The devil will lie in the detail,” said Margaret Hodge, a member of parliament from the opposition Labour Party who has specialised in the issue of tax evasion.
“I can’t tell until I’ve seen the detail whether this is a PR stunt or a serious policy which will reveal the true ownership of properties here in the UK,” she told Reuters.
Hodge said she was concerned that the British Virgin Islands and other tax havens under ultimate British control were not present at the summit, and that until such territories also had public registers of beneficial owners the problem would remain.
Britain has acted in the past to impose bans on capital punishment and on anti-gay discrimination on its overseas territories, and Hodge said that if it chose to do so the government could do much more to force tax havens to open up.