LETTING & ESTATE AGENT

Sterling's Brexit slump risks more money-laundering attempts

Sterling's Brexit slump risks more money-laundering attempts

The plummeting pound following the UK's shock vote to leave the European Union risks creating more money-laundering operations through this country's property market. 

This is the view of Robert Barrington, the executive director of anti-corruption campaign group Transparency International.

In a blog on the TI website, Barrington claims the current Cameron-led government "has said and done more about tackling corruption than any other UK administration since the second world war."

But he says that the new incoming government - when a prime minister is selected by the Conservative party in September - risks being "distracted for years to come by a combination of the complicated divorce from Europe, economic uncertainty and very possibly domestic political instability."

In a key paragraph Barrington writes:

"The UK will want to ensure it is still seen as an attractive place to invest, especially during the anticipated longish period of economic uncertainty. That means it is less likely to turn away undesirable partners, and companies and public bodies in the UK will be eager for investment. Those looking to invest in a post-EU UK may, for example, be ... individuals wanting to use the UK as a safe haven for corrupt assets.  On the upside, if the UK looks less stable, it may attract fewer corrupt oligarchs and foreign public officials in the first place; but it's very possible that those who come will be given a warmer welcome than they deserve, and that a blind eye may be turned to their corrupt dealings overseas for the sake of attracting investment to the UK."

In addition, in an article in the International Business Times, Peter Bolton King - former NAEA managing director and now global residential director at the Royal Institution of Chartered Surveyors - warns that the post-Brexit vote position of Sterling creates risks.

"There are cases of property being used for money laundering, without any shadow of a doubt, and everybody has to work even harder to make sure we clamp down on that. With the sterling rate, it certainly doesn't make life any easier... There obviously is the potential for more overseas money and by its very nature it could potentially up the level of dodgy money coming in... The risk has not changed. The potential quantity of risk could go up."

A report last year by Transparency International said over £180m of property in the UK had been brought under criminal investigation as the suspected proceeds of corruption across a decade.

It was also critical of the poor reporting record of estate agents on the subject, claiming British agents reported only 179 suspicions of money laundering in a year.


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