Scottish Limited Partnerships are a preferred money-laundering tool of the world’s criminals, looters and oligarchs, especially favored by criminals from the former USSR, who have pumped an estimated $80B through them in the past four years alone.
After a series of press exposes, the Department for Business, Energy and Industrial Strategy (BEIS) conducted an investigation of the SLP racket and came back with the extraordinary claim that five people are responsible of the majority of the money-laundering, and eac of these people has thousands of companies registered in their name.
This should be an obvious red flag, but somehow the authorities failed to notice that billions of pounds were being filtered through thousands of companies registered to just five people.
BEIS has proposed a new rule, that SLPs will only be registered to people who do business or maintain an address in Scotland (expect a lot of people to get paid to walk into an anonymous “shop” in some remote, cheap Scottish village and buy a single meaningless item twice a year to satisfy this requirement).
More significantly, SLPs will now have to have named “company formation agents” that will undergo money-laundering checks, and Companies House, the UK company registrar, will be able to remove companies from the official roles if they cease trading or are dissolved.
However, Companies House is grossly understaffed and will not get any new hires to police the thousands of companies that scammers will continue to register in order to help exfiltrate billions in stolen loot.
SNP MP Alison Thewliss, who has campaigned on the SLP issue, said: “Enforcement is the key and at the moment, I don’t believe there are the staff or resources to do this.“The biggest loophole is Companies House, a UK Government agency who are not held even to the same anti-money laundering checks as company formation agents. Without the powers, staff and resources to make verification checks and pursue dubious companies, Companies House will continue to leave the door wide open to dodgy business.”
The BEIS review also found SLPs had been linked to international criminal networks in Eastern Europe and had allegedly been used in arms deals. Business minister Andrew Griffiths admitted that SLPs were “being abused to carry out all manner of crimes abroad – from foreign money laundering to arms dealing”.
Staff shortages ‘threaten’ crackdown on shell firms [Maureen Sugden/The Herald]