Scottish shell firms used to bust sanctions against Putin
THERESA May has come under new pressure to stop Vladimir Putin and his associates using Scottish shell firms to bust sanctions after the Salisbury poisonings.
The Prime Minister is understood to be considering new measures to hit the Russian president and his oligarch supporters in the pocket after the attempted murders of Sergei Skripal and his daughter.
Her government has also said it will announce reforms to Scottish limited partnerships, or SLPS, a kind of firm dubbed “Britain’s home-grown secrecy vehicle” by anti-corruption campaigners.
However, the SNP last night warned the Kremlin and its proxies may be able to use the veil of SLPS’ secrecy to avoid sanctions.
The Herald has already revealed how SLPS were used to own sanction-busting ships running a blockade of Crimea imposed after the Ukrainian peninsula was invaded and annexed by Russia in 2014.
But the new concerns come amid claims that British ghost companies, including an SLP, had been used to help firms close to the Putin regime prop up the economies of two other breakaway regions of eastern Ukraine.
Pro-russian separatists have controlled most of the provinces of Donetsk and Luhansk– and their rich coalfields – since 2014. Widely regarded as Kremlin proxies, the unrecognised Republics of Donetsk and Luhansk have relied on exports of coal and steel to stay afloat.
They can ship their product over the border with Russia to Rostov-on-don, Glasgow’s twin city, and from there to Turkey and elsewhere.
Last year it was reported that 1 million tonnes of coal was leaving the regions a month. Ukrainian authorities have begun a criminal investigation in to what they regard as “contraband”.
Ukraine itself has been starved of its main energy source while seeing its separatists – which it sees as Putin proxies – profit from what it would think of as the sale of its coal.
SNP MP Alison Thewliss has been leading the campaign for reforms of SLPS in Westminster, which has control over Scots corporate law.
She said: “This is a further troubling example of the misuse of SLPS, which shows how even states are making use of them for their own ends.
“For British shell firms to be implicated in an international dispute, where they are circumventing and undermining the Ukrainian Government, is deeply concerning.
“If the UK is serious about stopping this abuse, they must crack down on the rules governing SLPS and other anonymous owned firms.”
Ukrainian news site Liga last year claimed a pro-kremlin oligarch called Serhiy Kurchenko was the “king of coal” in the Donbass, the name given to Donetsk and its rich anthracite fields.
Mr Kurchenko, a reclusive 33-year-old, made a fortune in Ukraine under the regime of the ousted former president Viktor Yanukovych. Both men fled to Moscow in 2014. Mr Kurchenko has been described as Mr Yanukovych’s “wallet”.
But firms owned by Mr Kurchenko and others are not the formal exporters of coal. Liga and other Ukrainian sources have named six “offshore” firms as doing this. Three are from Hong Kong, two are from England, one a limited liability partnership whose name, Coal Trade Antrahcit misspells the English word for its product, anthracite. That business has now been wound up. Liga also named an SLP, Bornholm Inter, as an exporter of “contraband” coal.
Both Coal Trade Antrahcit and Bornholm Inter have complied with UK rules under which they must name a person of significant control.
Steve Goodrich of campaign group Transparency International stressed complex corporate structures were often used by money-launderers. “Our research has found that UK companies are regularly being used by corrupt individuals and kleptocratic regimes to hide money they’ve stolen from their people and gained through illicit trade, including embezzlement, bank raids and sanctions-evasion.
“Although the UK Government has taken steps to peel back layers of secrecy, it needs to do more to ensure information submitted to Companies House is accurate.”