Russian property secrecy criticised amid corruption fears

The Russian government has approved legislation that would conceal property owned by state officials and would hamper anti-corruption investigations, Transparency International (TI) warns.

The move to make the state property registry secret is not yet law – it still has to go before parliament.

TI, an anti-corruption watchdog, said the new measure would “raise the impunity of government officials”.

It was proposed by the Federal Security Service (FSB), successor of the KGB.

A government committee approved the proposal this week. Most Russian MPs are government supporters, so it looks likely to become law.

“This could make it harder to tackle money-laundering and illicit enrichment,” said Andrey Zhvirblis, deputy director of TI’s Russian branch.

TI’s annual Corruption Perceptions Index gives Russia a poor rating for 2014. It ranks 136th out of 175 countries, below Pakistan, Kazakhstan, Azerbaijan and Mexico.

The FSB also wants to block public access to registries listing officials’ ownership of planes and yachts.

But many of those assets are registered overseas, often by companies, whereas home ownership in Russia is more serious, Mr Zhvirblis said.

Fraudulent claims

The FSB argues that ordinary citizens should be denied access to the Unified State Registry of Property Rights, a real estate database.

Only official bodies would be allowed to use that data freely without the property owner’s permission, under the FSB plan.

The FSB says that criminals have abused open access to the registry, and that commercial databases are profiting from the personal data.

Anti-corruption campaigner Alexei Navalny, a fierce critic of President Vladimir Putin, has exposed cases of civil servants owning property that appears lavish compared with their official salaries.

Before the open registry’s introduction in the 1990s, Mr Zhvirblis said, there were thousands of abuses involving fraudulent claims to property.

The new measure risks making home ownership and tenancies less secure and “will affect almost everyone”, he told the BBC from Moscow.

Currently a buyer can get the necessary ownership details from the registry for just 200 roubles (£2; $3), he said. Even so, he pointed out, “it just gives the plot of land and owner’s name” – not more personal data.

Mr Zhvirblis said it was not the role of the FSB to draft Russian laws, and “it’s strange that it’s becoming an entity doing that”.

President Putin ran the FSB in the late 1990s before becoming president. He had been an officer in the Soviet KGB, the communist secret police.

The news website Lenta.ru says the new proposal coincides with certain restrictions on Russian access to offshore havens. Western financial sanctions on Russia, as well as global anti-corruption efforts, have made the offshore option less attractive, it reports.

Putting a veil of secrecy on property in Russia could reduce the incentive for officials to keep their wealth overseas.