Oligarchs in London will have nowhere to hide.

London is awash with rushing money.

These are homes valued at tens of millions of pounds.

So much so it's even earned a nickname.

London.

Grad.

Oligarchs have come to London bought luxury properties in some cases football clubs, there was so much money coming in from that part of the world and it's not just Russians, billionaires from around the globe and their money love to call London home.

This is wealth beyond anybody's imagination.

The trouble is, it's not all clean Britain is one of the best places in the world to launder dirty money.

Why does it make it so easy?

Fasten your seat belts and put yourself in the hands of a magician.

World class shopping, high society.

It may seem natural that the super rich would want to live in the british capital, but the rise of London Grad wasn't a happy accident.

It was a business model.

This is a story that goes back to just after the Second World War in the 1950s Britain was really trying to deal with a loss of empire and looking for a new role in the world.

In 1956, the Suez Canal crisis led to massive sell offs of sterling around the world.

In response, the Bank of England encouraged a radical new kind of market british banks started to borrow, not by american dollars to do deals because there are trading in U.

S.

Currency.

This avoided Bank of England regulations, but because they hadn't actually bought the dollars, it avoided american ones too.

And that led to the development of what's called the euro markets, which essentially means trading currencies of different types outside of their home countries, Britain had taken offshore banking mainstream, the development of offshore banking was a big turning point because banks generally don't like regulation.

And what offshore allowed you to do essentially was to to use jurisdictions that had lighter regulation and just allowed more freedom when it came to moving capital around the world and storing it, british banking had changed forever And by the swinging 60s business was booming.

London had become the place to skirt banking regulations.

And at the same time you had a whole bunch of offshore territories of the United Kingdom.

They were actually encouraged by Britain to develop into corporate services and finance from the british Virgin Island to Jersey.

By the 19 eighties Britain had a web of overseas territories and crown dependencies that were helping clients to hide their cash and no one seemed to mind where the money was coming from.

Grand Caymans modern claim to fame is as an offshore tax and banking haven.

Then in 1991, the game really changed when the USSR fell.

Ex soviet nationalized industries were sold off at a fraction of their true value.

A few canny businessmen got very rich, very quickly Britain saw an opportunity, it goes back to john major in the 19 nineties, the major government introduced golden visas essentially if you were a wealthy foreigner and you wanted residency in the U.

K.

Even if you didn't intend to spend all of your time there, you could pay a large investment to win that.

Right.

Even at the time, the scheme had its critics seems quite astonishing to me, anybody who's laundered money simply to buy a ticket to to Britain.

But the bait worked, investing a million or two was a small price to pay for a billionaire.

Russia's super rich flocked to make London their second home.

London grad was born.

A lot of the money that comes here is perfectly legal, but tens of billions of pounds of it isn't.

So how does Britain help to hide dirty money?

If I was an oligarch and I was looking to launder money, I'd probably hire a, a team, would hire a wealth manager and they would suggest various structures into which I could place my wealth.

You would basically come up with a system that would diversify your money and make it virtually impossible for investigators to track that money.

If money can't be tracked, No one can prove where it came from or see who owns it.

Now that's where shell companies come in.

If one of those owns the money, it doesn't leave any fingerprints and setting one up in Britain is easy, You can register a company for as little as £12 in the UK and then use that company to hold a bank account in in Latvia or Switzerland.

Registering a company at London's companies house takes just 24 hours.

There are very few checks over a person's identity when you register a company that is changing as we speak and there are supposedly verification procedures being brought in.

But up until now anybody could register a company.

You didn't need to produce a passport or any personal identification.

You can register it online from, from overseas.

You don't even have to be the owner of the of the company according to the World Bank Britain is one of the easiest places anywhere to create a company.

The U.

K.

The best place to set up A Shell company certainly would put the UK in the top five, let's say including the overseas territories because it's just so easy to register a company here and in one part of the U.

K.

It's even simpler.

Limited partnerships are type of company that is only available in Scotland and they have fewer reporting requirements than the rest of the U.

K.

You don't have to file accounts.

For example, if turnover is under a certain amount, you can actually say that the companies involved in business, but you can provide no record of what that business actually entails.

But on closer inspection, wealth hidden in a Shell company still looks like wealth.

Putting money into property is a great way of disguising it and keeping it safe.

Excuse me for a second.

Yeah, interesting.

That's an iceberg.

It goes down as far as it goes up.

They're wrapping up building at this stage.

Arthur Doyennes activist group clamp K runs kleptocrats tours of London, showing people mega mansions bought with dirty money number 14 Walton Street, which is over here just behind these olive trees was the subject of the first unexplained wealth order that was brought to court by the N.

C.

A.

It's completely unfair that the ordinary british citizen voter taxpayer has to compete for a british house with this foreign stolen money.

We know there are thousands of properties in this part of London that are owned through these kind of shell companies, here's how that can work.

A house can be bought through an offshore bank account.

That bank account can be in the name of an offshore shell company.

That shell company could be owned by a trust somewhere else.

Suddenly the house with all that money in doesn't look like anything at all.

It's a great trick for hiding dirty money.

Russians who have been accused of corruption or of having links to the Kremlin have bought at least £1..

kleptocrats in town at the same time, Real estate prices in the capital have risen to eye watering levels, prices are actually rising.

They're being pushed up by wealthy buyers active in the market, it all means increased inequality.

And a lot of these houses aren't even lived in an estimated £41 billion pounds worth of property stands empty in London alone.

That's more than the total value of all property in Liverpool.

This is in a city with a housing crisis.

But owning an empty house isn't illegal, which makes seeing when it involves dirty money very hard.

It's a challenge that Britain is finding tough to take on the UK talks a good game.

The one thing that's lacking at the moment is sufficient backing for the police, for the National Crime Agency and for other agencies that look into this.

Italy the US.

Some other european countries tend to invest a bit more on a sort of you know, pound by pound basis, so to speak, in anti corruption efforts.

The British government spends just under £1 billion 100 times that.

But weak enforcement isn't the only reason the U.

K.

Has become a magnet for dirty cash.

It also has a name for cleaning reputations as well as money for someone who's been involved in money laundering or deals involving tainted cash, reputation laundering is useful in one particular way and that is to stymie investigation by for instance journalists or NGos, we've seen oligarchs and other foreigners doing this in the U.

K.

If an investigative journalist is is looking into you, you can strike back a number of public relations and law firms have come to specialize in in helping helping wealthy foreigners to in some cases appear more safely than they might be in reality.

But since Russia's invasion of Ukraine, the charm offensive has stalled the british government has promised to clamp down on money laundering and has sanctioned individual oligarchs.

How will Britain cope without their money?

Actually not so badly.

Rich Russians may spend big while they're here, but Britain gets less from them than you might think.

In 2020, foreigners held roughly £13 trillion British assets.

Russia's share of that was just 0.16%, a smaller proportion than that of Finland or South Korea.

I think there's a question about how much the money that's coming from.

Russians actually benefits that the broader economy and the potential cost for Britain could be much higher.

Well, there's a huge amount at stake when it comes to London and dirty money because London is one of the world's biggest financial centers and it trades on being legitimate and on being clean and on being a place where sophisticated investors can come and do business and get financing.

If the city is tainted with dirty money.

Ultimately, that's bad for its reputation Britain has had that reputation for years, but it's taken the war in Ukraine for it to change its tune golden visas have been scrapped and part of a long delayed economic crime bill has now been passed.

No criminal or kleptocrats will be able to hide behind a U.

K.

Shell company ever again.

As Britain vows to clean up its act against all dirty money, sanctions against individual oligarchs are starting to bite.

But it was never just about Russians, A lot of Britain's dirty money is from other parts of the world.

And if shady Russian cash leaves dirty dough from elsewhere could easily take its place, will Britain be as keen on tightening up on dirty money when it's not Russians behind it.

The government needs to show that there is political will there to go after these oligarchs, not just Russian, there are plenty oligarchs across the world and we've simply not seen that over the last 20 years.

In fact, we've actively encouraged that money to these shore's and that needs to change if we have any effect at all.