UK shell firms linked to money laun­der­ing


LON­DON (Reuters) – Bri­tish shell com­pa­nies have been linked to 52 money-laun­der­ing scan­dals in­volv­ing £80 bil­lion ($105b.) over the past 14 years, ac­cord­ing to re­searchers at cam­paign group Trans­parency In­ter­na­tional.

Tax eva­sion and fi­nan­cial crime has shot to the top of the in­ter­na­tional agenda in re­cent days fol­low­ing re­ports based on leaked doc­u­ments from Ap­pleby, a prom­i­nent off­shore law firm founded in Ber­muda.

But the re­port from Trans­parency In­ter­na­tional’s UK arm said it is not just Car­ib­bean is­lands that are used to hide il­licit money flows, adding that Bri­tain was a key link in many of the largest cor­rup­tion scan­dals of re­cent years.

Fraud­sters in East­ern Europe and else­where of­ten chan­nel money through UK-reg­is­tered en­ti­ties be­cause they ap­pear to many peo­ple as more le­git­i­mate than tax-haven-reg­is­tered com­pa­nies, the non­govern­men­tal body said.

The UK Trea­sury de­clined im­me­di­ate com­ment on the re­port. Bri­tain says it is do­ing more than most coun­tries to tackle il­licit money flows.

It is the only coun­try to have in­tro­duced a func­tion­ing, pub­licly avail­able reg­is­ter of true ben­e­fi­ciary own­ers of com­pa­nies.

How­ever, the sys­tem is poorly po­liced. Com­pa­nies House, the body that over­seas Bri­tish cor­po­rate records, does not have the re­sources to ver­ify the in­for­ma­tion sub­mit­ted to it.

Also, suc­ces­sive Bri­tish gov­ern­ments have sought to make it easy to reg­is­ter com­pa­nies, for ex­am­ple, al­low­ing peo­ple to do so on­line and without ver­i­fy­ing their iden­ti­fi­ca­tion, in the hope this spurs en­trepreneur­ship.

This has led to a small in­dus­try of for­ma­tion agents es­tab­lish­ing blocks of com­pa­nies and part­ner­ships that they then make avail­able to over­seas par­ties.

Trans­parency In­ter­na­tional found that about half of the 766 com­pa­nies al­leged to have been in­volved in money-laun­der­ing schemes were based at just eight UK ad­dresses.

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