Campaigners query UK government’s ability to identify oligarchs’ assets

Transparency International says 33 properties worth £700m may be linked to sanctioned Russians

The British government’s ability to investigate the true ownership of properties has come into question after researchers found £700m of luxury homes previously linked to sanctioned oligarchs are not flagged for asset freezes.

The campaign group Transparency International UK has identified 33 houses, flats and office blocks in London or Surrey that are not marked as restricted on the UK property register, which it says have been publicly linked to sanctioned individuals, raising questions about whether they should have been flagged.

The properties in question include Witanhurst, a £50m house in Hampstead said to be London’s second biggest home after Buckingham Palace, and other valuable homes previously linked to the former Chelsea Football Club owner Roman Abramovich and the aluminium billionaire Oleg Deripaska.

Three are owned directly by people with names matching those designated for sanctions. A £31m home in Holland Parkhas an owner listed as Vladimir Evtushenkov, the largest shareholder in Russian IT company Sistema, and two flats in exclusive parts of Hampstead and Westminster have owners listed as Yuri Soloviev, an influential banker.

Soloviev was chair of the board of VTB, a bank with alleged close links to Russia’s government, although the bank has since reportedly said he left the board on the day the invasion of Ukraine started. Soloviev and VTB did not respond to requests to comment. Evtushenkov and Sistema declined to comment.

Oligarchs hit by sanctions are banned by law from selling property without explicit permission under an asset freeze that permits transactions only for the necessities to live, such as utility bills and food. Restriction notices on the Land Registry’s titles alert potential buyers, estate agents and lawyers that the property can be sold only with explicit permission from the Office of Financial Sanctions Implementation (OFSI), which enforces UK sanctions.

There are 106 properties subject to sanctions restrictions, 92 of which have been added since Russia launched its invasion on 24 February, the Land Registry said.

Britain has used financial retaliation as one of its main responses to the invasion of Ukraine by Vladimir Putin’s regime. The government said it hoped to impose a “large and lasting cost on Putin and those close to him”.

The findings by Transparency International will raise questions about the impact of financial sanctions, and the ability of the UK authorities to determine the true ownership of some of the most prominent addresses in the country. Many of those not marked as restricted are owned by opaque shell companies, but have been linked in previous reports to oligarchs, according to leaked documents.

Those properties include:

  • The £90m home on Kensington Palace Gardens which has been repeatedly reported as belonging to Abramovich. The Land Registry lists the owner as A. Corp Trustee Ltd, a Cyprus company that gave a company at Chelsea’s stadium as its service address.

  • Hamstone House, a £7m Surrey art deco mansion in the gated St George’s Hill estate that has been linked to Deripaska. The property is owned via Cyprus-incorporated Edenfield Investments.

  • Witanhurst, reportedly linked via a series of companies to the chemicals magnate Andrey Guryev. The property is owned via Boradge Ltd, incorporated in the British Virgin Islands.

Deripaska denied owning Hamstone House when approached by the Guardian. His spokesperson denied he was linked to Putin and said the property belonged to a relative. Guryev’s London-based lawyers said: “Mr Guryev does not own Witanhurst,” without providing further details. Guryev’s spokesperson has previously told the New Yorker that he was a beneficiary of a trust owning the property but not the legal owner.

Abramovich did not respond to a request for comment. He has previously not commented on reports about his properties, but has denied links to the Kremlin.

The research highlights the continued role of offshore secrecy jurisdictions in obscuring the true owners of properties.

Financial transparency experts say it is reasonable for authorities to examine properties controlled by family members or close associates of people designated for sanctions, as they may in some cases be held on behalf of another person. UK government guidance says asset freezes can apply even if property is held in another person’s name, if it is reasonable to believe that the designated person has control of it either directly or indirectly.

Margaret Hodge, a Labour MP who has campaigned to improve the UK’s transparency laws, said: “These important findings demonstrate that there could be glaring gaps in our sanctions regime stemming from a total lack of transparency in much of our financial world, especially our property market.

“If sanctioning Russian companies and individuals is to have any hope of crippling the Russian economy, then the new government must look again at how our sanctions are being enforced. Then the next step must be to urgently consider how we can move from seizing oligarchs’ wealth and assets to support the war effort in Ukraine, instead of just freezing them.”

Restriction notices on Land Registry titles act as a first line of defence to prevent properties being sold by people subject to asset freezing sanctions, although lawyers and estate agents must by law also make their own checks on whether buyers and sellers are subject to sanctions.

The notices typically use identical text saying sellers require “the written consent of the Office of Financial Sanctions Implementation”.

HM Land Registry (HMLR) said some properties would not be marked as restricted because there was not enough evidence of ownership, particularly if they were owned via anonymous trusts. In some cases public reports of ownership of a property have been incorrect, she added.

“HMLR has no powers of investigation and must rely on other sources of evidence to determine if a name match to a sanctioned individual can provide sufficient proof that it is also owned by that person,” a spokesperson said. Evidence of ownership can be “very difficult to obtain, if at all”.

Ben Cowdock, investigations lead at Transparency International UK, said: “Sanctions will only achieve their intended aims if they are enforced effectively, which is dependent on the private sector’s active compliance with the law.

“It is vital that businesses inform authorities if they identify assets belonging to sanctioned individuals, and highlight where any properties subject to these restrictions should not be for sale. Failure to do this creates an information black hole, which increases the risk of sanctions evasion.”


Jasper Jolly

The GuardianTramp

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