Gulf real estate investors welcome UK law to attack criminal finances

Gulf investors Saturday welcomed tough new laws being planned in Britain to tackle London’s reputation as a haven for dirty money. 

Their reaction came amid claims in British mainstream media that huge amounts of corrupt wealth are laundered through London’s banks.
“These new laws will enhance the reputation of London or the UK as a healthy real estate market and it will add to its credibility as a financial center as well,” Basil Al-Ghalayini, CEO of BMG Financial Group, told Arab News.
Al-Ghalayini, who has huge interests in British real estate and other parts of the world, pointed out that the process to acquire properties in the UK already goes through a very diligent scheme. This has enhanced the credibility of the purchase transactions, he said.
Al-Ghalayini’s comments to Arab News follow reports that British law enforcement agencies will be given new powers to seize the proceeds of crime and demand criminals explain the origins of their wealth under new legislation published Thursday. (Oct. 13) 
Mohamed Ramady, London-based economist and former professor at King Fahd University of Petroleum and Minerals in Saudi Arabia, told Arab News: “Gulf investors should not be discouraged from buying property in Britain but need to ensure that they have access to reputable accounting firms to help them state their legitimate sources of income as the aim of the new legislation is not to tax them but to ensure that legitimate funds are being used.”
According to reports, the Criminal Finances Bill will strengthen the partnership between the public and private sectors, boosting the fight against illegal activity.
Among the measures being introduced are unexplained wealth orders, which will force those suspected of serious crime to explain where their wealth has come from, or risk having it seized.
British media stated that the criminal finances bill is designed to close a loophole which has left the authorities powerless to seize property from overseas criminals unless the individuals are first convicted in their country of origin.
The orders will apply to property and other assets worth more than £100,000. If the owner fails to demonstrate that a home or piece of jewelry was acquired using legal sources of income, agencies will be able to seize it.
Reacting to the new measures, Ramady said: “The introduction of such an act has been partly in response to the Panama Papers leak and the revelation that foreigners — especially those in public office — own prime properties in the UK but that the 100,000-sterling threshold for investigation is a bit too low as many foreigners own properties in London under the 2 million range and it will put some investors off from buying properties in the UK.” 
The economist added: “This is so even if the pound's fall is making purchases attractive due to the onerous details that have to be provided as to the source of income — especially for those in self-employment or private family businesses as is the case with many investors from the Gulf.”
Commenting further, Al-Ghalayini told Arab News: “Unfortunately, the UK real estate market and London in particular has been a user-friendly destination for dirty money that is transferred by Russians, Iranians, Bulgarians and certain African nationals to channel it into luxury real estate. That, in turn, pushed the real estate prices up in a very speedy and unjustifiable way."
Reports about the new bill have emerged at a time when Arabian Gulf property investors are reportedly bargain hunting among London’s most exclusive addresses as prices tumble against the background of Brexit uncertainty and a weak pound.
“Genuine investors need not worry about this,” Iseeb Rehman, CEO of Dubai-based Sherwoods International Property, told Arab News.
The bill is not going to discourage them from investing in the British property market, said Rehman.
The Criminal Finances Bill will help further regulate the real estate market in Britain, he added.
According to reports, campaigners In London say that for the new law to be effective, agencies must be given the financial and political support to take powerful and wealthy individuals to court.
“We simply cannot continue to roll out the red carpet to the world’s corrupt elite wanting to lodge their illicit wealth in the UK,” Robert Barrington, director of Transparency International, was quoted as saying in The Guardian.
“The UK has a responsibility to ensure that any stolen wealth flowing into the country is stopped, frozen, and ultimately returned to the people from whom it was stolen.”
Commenting on the new legislation, Security Minister Ben Wallace said: “The UK is one of the best places in the world to do business but it will only stay that way if we take steps to protect the integrity of our financial system and the security of our citizens.”
Wallace said: “We will not stand by and watch criminals use the UK to launder their dirty money or fund terrorism.”
The minister said that the legislation will ensure the UK is taking a world-leading role in cracking down on corruption and send a clear message to criminals – we will take your liberty and your money.
Anthony Browne, British Bankers’ Association CEO, said: “Criminals exploit financial transactions to serve their wicked ends. In an ever growing digital world they continually try to find new ways in which money can enter and leave the economy looking legitimate.”
The CEO added: “Reforms are needed to protect individual victims and the economy. The Criminal Finances Bill provides an opportunity for the public and private sectors to get ahead of the criminals and clamp down further on money laundering and corruption.”

Source: Arab News