What are SLPs?

SCOTTISH Limited Partnerships, to give them their proper name, were once a means for farmers to share fields. Then some lawyers figured out such structures made tax-efficient vehicles for managing equity funds. And others realised they were also enticing for people who want to avoid more than just tax.

Writer Oliver Bullough has explored the murky world of international offshore finance – and its effect on some of the planet’s poorest nations – for his book Moneyland. He has long watched SLPs being abused.

“SLPs and shell structures like them are absolutely crucial to anyone who has wealth to hide,” he explains. “Without them, it would be impossible for crooks and thieves – whether they’re rulers of former Soviet states, or leaders of drugs cartels – to move their wealth out of the shadows and into the legitimate economy.

“SLPs are useful to crooks because, unlike limited partnerships elsewhere in the UK, they have legal personality and thus can own bank accounts and other assets, enter into contracts, and take on debt. If the SLP’s partners are offshore companies, then their ownership is completely opaque.

“The great advantage of Britain as a place to register a company is that the company looks legitimate, because it’s British, but really is not. Our money-laundering regime is so lax, and Companies House doesn’t check the accuracy of any information supplied to it. This is why British structures are almost invariably found in the biggest financial scandals.”

The abuse of SLPs, Bullough stresses, is not a victimless crime. “More than $1 trillion a year is stolen from the world’s poorest countries, devastating their economies and spreading misery and destitution,” he says. “That would not be possible without shell structures like SLPs, and it’s imperative the UK Government acts to reform them so they can no longer be misused in this way.”

A spokesman for the Department for Business, Energy and Industrial Strategy said: “The UK is leading the global fight against money laundering. Changes to the law last year have increased the transparency of these financial arrangements, reducing the likelihood of them being used for illegal purposes. We carefully developed our recent reforms to further prevent these crimes without harming the legitimate businesses and pensions that invest through limited partnerships.”