
Luxury London Properties Linked to Family of Azerbaijan's President Are Hidden Behind an Offshore Trust
The family and associates of Azerbaijani strongman Ilham Aliyev acquired U.K. real estate worth hundreds of millions of dollars. Are they still holding onto their property empire? Despite new transparency reforms, there’s no way for the public to know — because of the special treatment afforded to offshore trusts.
A hotel building near the British Museum. Penthouse apartments just steps away from Hyde Park. A mansion overlooking the green expanse of Hampstead Heath. And much more.
In 2021, OCCRP revealed that a nearly $700-million collection of London real estate had been acquired by the family and close associates of Ilham Aliyev, the longtime authoritarian president of Azerbaijan. Having leveraged two decades of unchallenged political power into vast wealth, this elite group had chosen to spend a fortune in one of the financial centers of the democratic world.
The properties they purchased were owned by dozens of secretive offshore companies, hiding their ownership from public scrutiny. It was only thanks to the Pandora Papers, a leak of secret offshore documents obtained by the International Consortium of Investigative Journalists, that reporters were able to link them to them to the Aliyevs.
Since then, the U.K. has introduced transparency reforms intended to make it more difficult for the wealthy and powerful to hide their ownership of property behind offshore structures.
The 2022 Economic Crime (Transparency and Enforcement) Act, also known as the ECTE Act, requires foreign entities that own or buy British land to disclose their beneficial owners in a new “Register of Overseas Entities.”
This should make finding any property’s owner a matter of performing a simple search of the online database run by Companies House, the U.K. corporate registry. But how far has transparency increased in practice? Does the new register actually reveal whether the Aliyevs still hold their vast London property portfolio?
We decided to find out. Reporters from OCCRP teamed up with researchers from Transparency International UK, an anti-corruption advocacy group, to reexamine the 23 London properties our earlier investigation had linked to the Aliyevs. In theory, the “Register of Overseas Entities” should publicly name the human beings behind the faceless offshore companies that hold the properties.
In six cases, it does: The Register publicly reveals for the first time that President Aliyev’s daughters, Leyla and Arzu Aliyeva, personally own six luxury apartments just across the street from Hyde Park.
But the Register fails to establish who ultimately owns 10 properties the Aliyevs and their associates had acquired for $160 million: the Hampstead Heath mansion, two townhouses, multiple flats and penthouses, and a six-story building in Central London. It only reveals that they are owned by a trust registered in the Isle of Man.
Trusts are arrangements that allow an asset to be managed by one person for the benefit of another. There are many legitimate reasons to use a trust, like managing the wealth of someone who cannot do so themselves because they are underage or incapacitated.
But, as the case of the Aliyevs demonstrates, trusts can also shield controversial and wealthy figures from scrutiny.
The issue is not confined to the U.K. Studies by the World Bank, the OECD, and other organizations have highlighted the use of trusts by corrupt actors across the world to disguise their involvement in corporate structures.
But it has emerged as a key bone of contention between British transparency campaigners and privacy defenders as the country tries to make its financial system less vulnerable to dirty money. According to research by Transparency International published in 2023, 7,000 offshore companies holding over 20,000 properties across the U.K. are owned by trusts — a quarter of all the companies on the Register. Although the ECTE Act requires the trusts to reveal their beneficiaries to Companies House and tax authorities, there is no functional way for journalists, transparency advocates, or the public to gain access to the information.
Anna Powell-Smith, head of the London-based Centre for Public Data, described the situation as a “two-tier system,” in which wealthy people can pay to set up structures that conceal their property ownership from the public.
“For most of us, anyone can look up our property at the land registry and see who owns it,” she explained. “But if you can afford to use a trust, your ownership remains hidden from the public. We need full transparency for the housing market to work properly, and to tackle corruption and money laundering.”
Since the ECTE Act passed, transparency advocates like Powell-Smith have kept arguing for trust information to be made publicly available, asking the government to close what they see as an obvious loophole.
“The reforms in 2022 after the invasion of Ukraine were designed to stop London property being used in ways that weren't transparent and that damaged Britain's reputation,” she said. “And by leaving loopholes for trusts, the law isn't working as intended.”
Write a comment