The new Provision in UK law to halt money laundering by rich Nigerians

September 3, 2022

A series of reports exposed how rich Nigerians set up shell companies in London to accumulate anonymous properties in London. The report listed 233 UK properties at an estimated value of £350 million which had been secretly bought by 137 wealthy and politically exposed (PEPS ) Nigerians using 166 anonymous offshore shell companies.

The collaborative investigation by Premium Times (PT) and Finance Uncovered (FU) in a series of reports exposed how rich Nigerians set up shell companies in London to accumulate anonymous properties in London. The report listed 233 UK properties at an estimated value of £350 million which had been secretly bought by 137 wealthy and politically exposed (PEPS ) Nigerians using 166 anonymous offshore shell companies. The report also brought to light London’s notoriety for allowing the flow of suspicious funds into its real estate. The names listed included Mohammed Bello-Koko, the chief executive of the Nigerian Ports of Authority; GObeyega Oyetola, Osun State governor; Stella Oduah, a senator and former minister Stella Ogene, , a jurist and so on.

It was alleged that through the earlier provisions, the rich Nigerians evaded due diligence in the UK and hid behind shell companies incorporated in the UK to anonymously buy properties in the UK. The Code of Conduct Bureau in Nigeria to determine the true worth or if they had amassed illegitimate wealth was also blocked.

UK has brought in a new law Economic Crime (Transparency and Enforcement) Act 2022, that makes it mandatory for offshore companies to declare their beneficial owners. The new law, through the Register of Overseas Entities, held by the UK’s Companies House requires foreign companies that own, sell or buy property, to declare their beneficial owners. The UK had been facing severe criticism for its complacency in fighting international corruption by allowing a legal loophole for overseas companies to own property.

Those who fail to comply will have to face severe sanctions, including restrictions on buying, selling, transferring, leasing or charging their land or property in the UK. The parties must comply to the new norms by January 2023. The law applies to those who bought properties from 1 January 1999 in England and Wales and from 8 December 2014 in Scotland. For Northern Ireland, it starts from only from 1 August 2022.