Pandora Papers: MPs urged to tighten UK's laws against 'dirty money'
4th October 2021

Calls for ministers to tighten Britain’s laws against moving ‘dirty money’ – as Queen’s property managers launch probe after buying £67m home from ‘corrupt’ Azerbaijani president

  • Pandora Papers showed how offshore companies were used to buy UK property  
  • Crown Estate said it carried out all checks required by UK law before purchase
  • Transparency International said the leaked papers should act as a ‘wake up call’ 

The Government is facing fresh calls to tighten Britain’s defences against ‘dirty money’ after a leak of offshore data exposed the secret financial dealings of some of the world’s richest and most powerful people.

The cache of almost 12 million files – dubbed the Pandora papers – is said to cover the activities of some 35 current or former world leaders, more than 300 public officials and 100 billionaires.

According to BBC Panorama, which conducted a joint investigation with the Guardian, among the disclosures in the papers are details of the way prominent and wealthy people have been legally setting up companies to secretly buy property in the UK.

Following the release, the Crown Estate said that it was looking into the £67 million purchase of a London property from a company which reportedly acted as a ‘front’ for family of Azerbaijan’s President Ilham Aliyev whose record has long been criticised by anti-corruption campaigners.

A spokesman for the Crown Estate said: ‘Before our purchase of 56-60 Conduit Street, we conducted checks including those required by UK law.

‘At the time we did not establish any reason why the transaction should not proceed. 

‘Given the potential concerns raised, we are looking into the matter.’

Meanwhile, former prime minister Tony Blair and his wife, Cherie, angrily denied any wrongdoing after the papers said they were able to save more than £300,000 in stamp duty when they acquired a £6.45 million London property by buying the offshore company which owned it.

The Crown Estate said that it was looking into the £67 million purchase of a London property from a company which reportedly acted as a ‘front’ for family of Azerbaijan’s President Ilham Aliyev (pictured) whose record has long been criticised by anti-corruption campaigners

In a statement, a spokeswoman for the couple said they had bought the property in ‘a normal way through reputable agents’ and should not have been ‘dragged into a story about “hidden” secrets of prime ministers etc’.

The spokeswoman said: ‘The vendor was an offshore company. The Blairs had nothing whatsoever to do with the original company nor those behind it. 

‘The vendor sold the company not the property – again a decision the Blairs had nothing to with.

‘Since the purchase was of a company no buyer would have had to pay UK stamp duty on that transaction. 

‘However, because the Blairs then repatriated the company and brought it onshore, they are liable for capital gains and other taxes on the resale of the property which will significantly exceed any stamp duty.

‘For the record, the Blairs pay full tax on all their earnings. And have never used offshore schemes either to hide transactions or avoid tax.’

Tony Blair and his wife, Cherie, angrily denied any wrongdoing after the papers said they were able to save more than £300,000 in stamp duty when they acquired a £6.45 million London property by buying the offshore company which owned it

The disclosures are reported to be based on the leak of files from 14 financial services companies in countries including the British Virgin Islands, Panama, Belize, Cyprus, the United Arab Emirates, Singapore and Switzerland.

The files were passed to the International Consortium of Investigative Journalists in Washington which then shared access to the data with a number of media organisations including the Guardian and Panorama.

The reports acknowledge that many of the transactions in the documents involve no legal wrongdoing.

However the Guardian said they highlighted the central co-ordinating role played by London, with the city home to wealth managers, law firms, company formation agents and accountants serving their ‘ultra-rich’ clients

Duncan Hames, policy director at the campaign group Transparency International UK, said the disclosures should act as a ‘wake up call’ for the Government to deliver on long-overdue measures to strengthen Britain’s defences against ‘dirty money’.

‘These leaks show that there is one system for corrupt elites who can buy access to prime property and enjoy luxury lifestyles and another for honest hard-working people,’ he said.

‘The UK must redouble its efforts in tackling illicit finance, bringing in long overdue transparency reforms to reveal who really owns property here as well as resourcing regulators and law enforcement to clamp down on rogue professionals and corrupt cash held in the UK.’

Pandora Papers reveal world leaders and their associates avoided taxes and made huge property purchases using secret offshore companies 

  • Alleged Putin lover Svetlana Krivonogikh purchased a $4.1million apartment below Monaco’s casino via an offshore account in September 2003 – six months after allegedly giving birth to the Russian president’s child. Since becoming friends with Putin, the former cleaner seems to have amassed a luxury portfolio of assets, including a flat in a well-to-do area of St Petersburg, other properties in Moscow and a yacht, coming to a total of $100million – the Kremlin has refused to comment.
  • Former British prime minister Mr Blair and his wife Cherie saved some $434,000 (£321,000) in stamp duty when they bought an office in London by purchasing the offshore company that owned it – they have since angrily denied any wrongdoing. 
  • King of Jordan Abdullah II bin Al-Hussein was able to secretly add £70million worth of property to his portfolios after purchasing 15 properties in the UK and US – mainly in Malibu, California and in London and Ascot. 
  • Azerbaijani President Ilham Aliyev and his family and close associates snapped up more than $500million (£400million) worth of property in the UK – consisting of 17 properties, including an office block in London for $44.6million (£33million) for the president’s son Heydar Aliyev, aged 11. They also appeared to have made a $41.9million (£31million) profit after selling a London property to the Queen’s Crown Estate, which is managed by the Treasury
  • Czech Prime Minister Andrej Babis – who is facing an election later this week – failed to declare an offshore investment company used to purchase two villas for $16.2million in the south of France. 
  • President of Kenya Uhuru Kenyatta and six of his family members, who were revealed to secretly own 11 offshore companies containing $30million worth of assets.
  • Prime minister of Pakistan Imran Khan’s cabinet ministers and their families were shown to own millions of dollars worth of offshore companies.
  • President of Ukraine Volodymyr Zelensky was shown to have moved his stake in a secret offshore company just before his victory in the 2019 election.

 

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