An Edinburgh address gives firms an illusion of respectability

What is happening in Scotland is similar to what happened in Ireland.

One of the biggest historical scams was the use of non-resident companies in Ireland in the ’90s.

Money launderers used these firms to put large amounts of cash through annonymously on the way to their end destination – organised crime gangs around the world.

After one scandal too many played out on the front pages of Irish newspapers, the Irish Government were forced to act and ditched them more or less completely.

The reasons criminal organisations – and some legitimate ones – favour Scotland and Ireland is simple.

A company with a Scottish or Irish address is infinitely more appealing for a bank in South America to open up a bank account for.

It gives the firms an air of respectability an address in Azerbaijan or Russia does not.

The difference with Ireland is the action taken - Ireland more or less stopped the use of non-resident companies.

I understand in Scotland there has been some changes to the rules surrounding Scottish limited partnerships and that will help, but it’s unclear if it will be enough.

You also need to question if authorities are doing enough to audit some of these firms and find out what they are up to.

Who, for example, is checking companies with huge turnovers really exist or are purely used to wash money through? It seems no one. That is appealing for organised crime.

In some ways it’s like drink driving - if police are not seen to vigorously enforce catching those who do it, people will continue drink driving.

Scotland is in danger of scorching its reputation in the international community by allowing this to carry on. Martin Kenney is an international fraud and asset recovery lawyer based in the British Virgin Isles