A recent investigation has revealed that 33 properties owned by sanctioned Russian individuals in London and Surrey, valued at approximately £700 million, remain legally transferable despite sanctions imposed following Russia’s invasion of Ukraine in 2022. These properties, which include some held through UK-registered companies, can still be sold, remortgaged, or transferred to relatives under existing legal frameworks.

The UK government introduced sanctions aimed at restricting Russian oligarchs' ability to use London’s property market to launder wealth. However, many affected properties fall outside the scope of a government asset freeze. Ownership restrictions prevent sanctioned individuals from selling or residing in these properties, but legal ownership itself remains intact.

One property broker noted that several houses are owned by UK companies affiliated with sanctioned individuals such as Roman Abramovich. The broker explained that should these companies be dissolved by Companies House as a result of sanctions, ownership of the properties would transfer to the Crown, effectively enabling government confiscation. However, UK authorities have sought to avoid such measures due to concerns about the potential implications for the rule of law and legal precedents.

The question of asset confiscation has drawn criticism from anti-corruption advocates. Gretta Fenner, former head of the Basel Institute—a non-governmental organization focused on financial crime and corruption—warned that seizing assets without establishing they are proceeds of crime constitutes expropriation. “This is done by dictators not democracies,” Fenner said, cautioning against undermining legal standards even amid efforts to support Ukraine’s reconstruction.

One prominent example is a mansion at Five Belgrave Square in London, owned by Oleg Deripaska, a sanctioned Russian oligarch with close ties to the Kremlin. Deripaska purchased the property in 2003 for £17 million through an offshore company registered in the British Virgin Islands. The mansion’s estimated value has since risen to £50 million. Although Deripaska cannot sell or occupy the property due to sanctions, he remains its legal owner.

The findings highlight the complexities and limitations of current UK sanctions, which focus on operational restrictions rather than outright seizure of assets. As London continues to grapple with the legacy of Russian money in its property market, legal and ethical debates persist over how best to balance sanctions enforcement with adherence to the rule of law.