Hundreds of British properties suspected of belonging to corrupt politicians, tax evaders and criminals could be seized by enforcement agencies under tough new laws designed to tackle London’s reputation as a haven for dirty money.

Huge amounts of corrupt wealth is laundered through the capital’s banks. The National Crime Agency believes up to £100bn of tainted cash could be passing through the UK each year. Much of it ends up in real estate, and in other assets such as luxury cars, art and jewellery.

The criminal finances bill, published on Thursday, is designed to close a loophole which has left the authorities powerless to seize property from overseas criminals unless the individuals are first convicted in their country of origin.

It will introduce the concept of “unexplained wealth orders”. The Serious Fraud Office, HM Revenue and Customs and other agencies will be able to apply to the high court for an order forcing the owner of an asset to explain how they obtained the funds to purchase it.
The orders will apply to property and other assets worth more than £100,000. If the owner fails to demonstrate that a home or piece of jewellery was acquired using legal sources of income, agencies will be able to seize it.

The law targets not just criminals, but politicians and public officials, known as “politically exposed persons”. Depending on how quickly it passes through parliament, the bill could come into force as early as spring 2017.

“There are some hundreds of properties in the UK strongly suspected to have been acquired with the proceeds of corruption,” said the campaign group Transparency International, which has been pressing for the new measures. “This will provide low-hanging fruit for immediate action by law enforcement agencies, if those agencies are properly resourced.”

The Guardian revealed through the Panama Papers how a powerful member ofMuammar Gaddafi’s inner circle had built a multimillion-pound portfolio of boutique hotels in Scotland and luxury homes in Mayfair, Marylebone and Hampstead in London. Ali Dabaiba, who was head of Libya’s infrastructure fund for a decade, has been accused by government prosecutors in Tripoli of plundering money meant for hospitals, schools and archaeology. He rejects the allegations.

Scottish police have confirmed they are investigating, but Libya’s request for an asset freeze has not been implemented.

Bukola Saraki, the president of the Nigerian senate who faces allegations that he failed to declare his assets, owns a property in Belgravia in his own name.

The Panama Papers revealed that the £5.7m property next door belonged to Seychelles and BVI companies benefiting Saraki’s wife and former special assistant. Saraki said he had declared all his assets correctly and in accordance with Nigerian legislation.

Nigeria’s president Muhammadu Buhari, who criticised David Cameron at an anti-corruption summit in London this year. Photograph: Sunday Alamba/AP
During the London anti-corruption summit in May, the Nigerian president, Muhammadu Buhari, was asked if he demanded an apology from David Cameron for a gaffe in which the prime minister was filmed describing the west African country as “fantastically corrupt”. Buhari replied that he wanted action: “What I am demanding is the return of the assets”.

Unexplained wealth orders will also help expose the owners of properties. Land Registry figures show UK real estate worth more than £170bn is held by more than 30,000 tax haven companies.

Most owners of these companies hide behind anonymous trusts, or nominee directors and shareholders. In a single 50-storey apartment complex in London, the Tower at St George Wharf in Vauxhall, a quarter of the flats are held through offshore companies.

Those targeted will not need to be resident in the UK. So long as their assets are in the UK, an order can be enforced. The law will apply to property acquired before it is introduced.
The bill also contains stronger seizure and forfeiture powers designed to make it easier for police and investigators to freeze bank accounts and confiscate assets such as jewellery and art, which are harder to seize under current laws.

“We will not stand by and watch criminals use the UK to launder their dirty money or fund terrorism,” said the security minister, Ben Wallace. “This legislation will ensure the UK is taking a world-leading role in cracking down on corruption and send a clear message to criminals – we will take your liberty and your money.”

Campaigners say that for the new law to be effective, agencies must be given the financial and political support to take powerful and wealthy individuals to court.

“We simply cannot continue to roll out the red carpet to the world’s corrupt elite wanting to lodge their illicit wealth in the UK,” said the director of Transparency International, Robert Barrington. “The UK has a responsibility to ensure that any stolen wealth flowing into the country is stopped, frozen, and ultimately returned to the people from whom it was stolen.”