How Britain inadvertently lets the Kremlin and its cronies off the hook

BRITAIN backs EU existing sanctions against Vladimir Putin. It also – inadvertently – helps Russia’s newly re-crowned leader bust them.

The UK, Theresa May said yesterday, is “actively considering” further measures against the Kremlin following the attempted murders of double agent Sergei Skripal and his daughter Yulia. The prime minister did not announce any new sanctions, despite growing clamour for Mr Putin and his cronies to be “hit in the pocket”. But, before she does, she and her officials should think about how to make them stick.

And that might mean tackling the industrial scale abuse of British – and especially Scottish – shell firms in the former Soviet Union.

UK ghost businesses, such as Scottish limited partnerships or SLPS, are known to have been used to bypass Ukrainian, EU and other sanctions imposed on Mr Putin and his regime following the invasion and annexation of Crimea in

2014.

Last year, for example, we reported the fate of a ship called the Tallas, listing in Istanbul bay, its crew left abandoned. The freighter had been used to run the blockade of Crimea imposed by Ukraine after the peninsula was seized by Russia. Its true owners were able to escape punishment in Ukraine or elsewhere for trading with Crimea because they hid behind an anonymous firm.

The Tallas was formally registered in the name of an SLP registered at a council house in Inverness. The home’s tenant had no knowledge of the whole episode. Why an SLP? Because they do not just let their owners remain secret – despite recent reforms to boost transparency. They also have legal personality: they can own things.

Today we report British firms – including an SLP – are fronting for exports for “contraband” coal smuggled out of two other parts of Ukraine, the regions of Donetsk and Luhansk currently largely controlled by separatists regarded as Russian proxies.

But the activities of secrecy vehicles such as SLPS are, by their very nature, hidden. So we can only guess how often they have been used to bust sanctions or just hide the true source of goods. Take the import of liquid gas through an unauthorised port near Crimea reporter in Ukrainian media last year. Shipments were made by an SLP. Scotland has oil and gas, sure. Or maybe the cargo came from a giant gas-rich country a bit nearer to Ukraine?

It is not impossible that, after Salisbury, Britain will introduce sanctions against individuals linked to the Putin regime or oligarchs which support it.

Those individuals will want to find a way to hide their identity. Britain offers that service, with SLPS or limited liability partnerships (LLPS) or even limited companies with patsy directors nobody checks.

True, the government now insists SLPS or LLPS name a person of significant control, or PSC, effectively an owner. Thousands have not done so. None have been prosecuted for this failure. But any partnership that wants to comply with the letter of the law can buy a fake owner online for a fake PSC.

The price? €170. Most oligarchs or sanction-busters can afford that.