Legal loopholes that could allow Vladimir Putin's allies to avoid UK government sanctions and own property in London need to be urgently closed, it has been warned.
Research by the Kensington Against Dirty Money campaign estimates that more than 40 per cent of overseas-owned properties are hidden behind trusts.
This is despite a public register of foreign business-owned buildings in Britain being launched by the government in a bid to crackdown on economic crime.
It comes after an investigation found that a multimillion-pound mansion in Belgravia was owned by Putin ally Igor Komarov.
The huge home in Herbert Crescent was purchased via a British Virgin Island-based company controlled by a trust, the probe by the ICIJ found.
Joe Powell, who co-founded Kensington Against Dirty Money, met with Eduard Fesko, the senior diplomat at the Ukrainian embassy on Monday to call for urgent action.
He said: “Two years after the full-scale invasion of Ukraine, it is unconscionable that senior allies of Vladimir Putin have still not had luxury property in Kensington frozen despite being on the UK sanctions list.”
Komarov, a Russian financier, bought the property in 2007.
He was sanctioned by the British Government in 2022, after Russia launched its full scale invasion of Ukraine, and his assets should have been frozen.
Mr Powell, who is Labour's general election candidate for Kensington and Bayswater, added: “The government claims that they want to crack down on dirty money in London, but they have still not closed the loophole that allows property to be owned through anonymous trusts in tax havens.
“This makes a mockery of the attempt to enforce sanctions against people actively involved in Russia's illegal full-scale invasion of Ukraine.”
Shadow Foreign Secretary David Lammy has pledged to make London the "anti-corruption capital of the world" by strengthening dirty money laws.
At last year’s party conference he announced that Labour would introduce a new whistleblower scheme to reward those who expose stolen assets and sanctions breaches and help to recover misappropriated funds.
The the Economic Crime Act was pushed through parliament in 2022 in response to the Russian invasion of Ukraine.
It improved transparency about ownership of UK properties and includes powers to issue new kinds of sanctions.
Unexplained Wealth Orders were also introduced by the Conservative government to target dirty money in Britain.
The legislation, later dubbed a “McMafia” law in the wake of the hit BBC series starring James Norton, which depicted corrupt Russian oligarchs living in the city, was strengthened in 2022.
A spokesman for the Office for Financial Sanctions Implementation (OFSI) at the Treasury said anyone subject to sanctions should have their assets, including property, frozen and that non-compliance with UK sanctions is a serious offence.
They added that the OFSI assesses every instance of reported non-compliance, and takes action in all cases where a breach has occurred.
