New laws in crackdown on money laundering

A crackdown is being launched to close loopholes in Scottish Limited Partnerships (SLPs) which have been abused to launder dirty foreign money.

The UK Government said thousands of British businesses use limited partnerships and SLPs legitimately but research found they have been exploited in laundering schemes, including one which used 100 SLPs to move up to $80 billion out of Russia.

They have also been linked to international criminal networks in Eastern Europe.

Under new proposals, users will need to have a real connection to the UK and do business or maintain an address in Scotland to operate an SLP.

They will also need to register through an agent who will carry out anti-laundering checks.

Figures published for the launch of a UK Government consultation on SLP reforms this week show just five frontmen were responsible for more than half of 6,800 SLPs registered between January 2016 and mid-May 2017.

By last June 17,000 SLPs were registered at just 10 addresses.

Last year, laws introduced requiring SLPs to report their beneficial owner and make their ownership structure more transparent led to an 80% reduction in the number registered.

The latest reforms will apply to all limited partnerships in the UK.

They will include new annual reporting requirements for limited partnerships in England and Wales and Northern Ireland.