MPs have criticised “totally inadequate” government attempts to prevent the UK property market being exploited by international money launderers.
The Home Affairs Select Committee said the UK has “laid out a welcome mat” to criminals, with chair Keith Vaz saying £100bn was being laundered through the country every year.
The MPs also called for a separate criminal offence if a person refuses to hand over money and assets derived from crime.
They said the current system for enforcing confiscation orders imposed by the courts is failing, with only a “paltry” 26p in every £100 being made back.
The MPs were also shocked to find that only 335 out of 1.2 million property transactions last year were deemed to be suspicious by law enforcement officials.
Committee chair Keith Vaz said: “”At least £100bn, equivalent to the GDP of Ukraine, is being laundered through the UK every year. The proceeds of crime legislation have failed.
“London is a centre for money laundering, and its standing as a global financial centre is dependent on proactively and effectively tackling money laundering.
“Investment in London properties is a major route which tarnishes the image of the capital. Supervision of the property market is totally inadequate.”
Labour MP Mr Vaz also said the National Crime Agency’s (NCA) system for reporting suspicious transactions was “not fit for purpose”.
He said it was so overburdened that it was “a futile and impotent weapon in the global fight against criminal financing, with no indication from the Home Office as to when a new state-of-the-art system will be purchased”.