UK crackdown on dirty money shell firms is ‘too little, too late’

THE UK Government has been accused of doing “too little, too late” to tackle dirty money as it announced a much-awaited crackdown on Scotland’s notorious limited partnerships or SLPS.

Conservative ministers said they were determined to stamp out abuse of the once obscure corporate entity, dubbed one of the world’s “money-laundering vehicles of choice” by anti-corruption campaigners.

The Government has been talking of a crackdown ever since SLPS, which for years provided the same kind of anonymity as Swiss bank accounts, were used in some of the biggest ever attempts to move and hide the proceeds of crime.

The CBI has warned that abuse of SLPS has hurt Scotland’s reputation overseas with “Scottish company” in some nations now as much a byword for sleaze as a Zurich numbered account. However, the UK’S final package of efforts to improve SLP transparency, announced today, has not impressed campaigners and money-laundering experts.

It failed to force SLPS to have a bank account or physical representative in the UK, as sought by those fighting corruption.

The measures mean the firms must have a UK address and an contactable agent, although this could be overseas.

Alison Thewliss, the SNP MP who has led the campaign for reforms in the House of Commons, said: “All steps to improve transparency around SLPS are, of course, welcome.

“However, the proposed reforms still fall far short of what is necessary to close the many loopholes which exist.

“The UK Government proposals are too little, much too late: billions have already been laundered through SLPS while campaigners have demanded action.

“I’m unconvinced these piecemeal proposals will be sufficient to the task. These changes continue to allow SLPS to have mailboxes as a UK address rather than having a UK bank account, which would be a tighter control.

“Allowing overseas agents, perhaps with lower standards, to be involved in the process does nothing to ensure the rigour of the system.”

The MP, meanwhile, argued Britain’s under-resourced corporate registry, Companies House, remained unable to police its own data.

No criminal action has been made against SLPS, which have ignored 2017 rules under which they had to name a Person of Significant Control or PSC.

Ms Thewliss said: “The lack of commitment to actually enforcing the rules is also breathtaking. To date, no fines have been issued for failing to register a PSC, but we know that this is an ongoing problem.

“The UK Government probably think they can hide this woefully inadequate announcement under the cloud of Brexit chaos this week.”

The UK Government did say that its SLP reforms would come ahead of further efforts to bolster Companies House.

Minister Lord Duncan said: “We continue to take the abuse of SLPS very seriously and will do everything necessary to crack down on crime lords exploiting them to launder dirty money.

“This latest package will deliver greater transparency and more stringent checks. It builds on measures we’ve already brought in to close loopholes in their use while ensuring legitimate companies can continue to choose SLPS as a way to invest in the UK.

Richard Smith, a money-laundering expert, said: “There is nothing in these proposals that suggests Whitehall has just spent the best part of two years consulting on the subject. The failure to grasp the scale and nature of SLP abuse is startling.

“The SLP reform process remains at square one.”

The proposed reforms still fall far short of what is necessary to close the many loopholes which exist