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.