LAWYERS who act for Scotland’s Panama-style secrecy firms face a career-ending crackdown under proposed new reforms.

Some of the biggest names in corporate law north of the border provide addresses for shell companies which have failed to comply with even the most basic anti-money-laundering rules.

They do so amid growing concern that Scottish business is facing the kind of ethical crisis over secret firms experienced in Switzerland over secret bank accounts.

Agenda: Scots firms should stop giving legal help to SLPs

However, law firms which represent or host businesses which fail to reveal their owners - and are therefore at risk of being abused by money-launderers or tax avoiders - can currently escape sanction.

Campaigning solicitor Mike Dailly in today’s Herald has called on industry watchdog the Law Society to tighten its rules so that any lawyer continuing to act for an anonymous shell firm could face disciplinary action.

His call comes after the UK Government last year ordered all Scottish limited partnerships SLPs to name their 'person of significant control', effectively their owner, if they had one, after a series of multi-billion-pound laundering scandals highlighted by The Herald.

Thousands of such SLPs, including hundreds registered at prestigious law firms, have failed to comply with this requirement. This means, Mr Dailly said, that they remain "the perfect partner to a shell company in Panama City.

READ MORE: Why it will take a change in ethics, not just rules, to end abuse of secret shell firms

Mr Dailly said: "While SLPs and company law is generally reserved to Westminster, the regulation of Scotland’s professions isn’t.

"Why should Scottish solicitors, accountants and others act for SLPs who flout the law? Simply explaining that the responsibility for compliance with transparency regulations rests with the SLP isn’t good enough. This should be a matter of professional conduct and ethics.

"For example, it isn’t in the public interest for Scottish solicitors to continue to provide services and/or host SLPs who ignore transparency regulations. There is a very real risk that continuing to act for SLPs with something to hide will damage the public interest and reputation of the legal profession in Scotland."

The Law Society did not respond to the specific proposal from Mr Dailly. A spokeswoman, however, said: “As the professional body and Anti-Money Laundering regulator for Scottish solicitors, we would take robust disciplinary action against any solicitor who through complicity or negligence enables the use of SLPs, or any other business structure, for criminal activity.

“We regularly review our practice rules and fully support measures aimed at preventing the misuse of SLPs. With the support of the profession, we will continue to engage with lawmakers, to influence effective reform.”

Mr Dailly said he understood politicians in Holyrood across parties would be prepared to legislate if the Law Society itself failed to beef up its own regulations.

READ MORE: Law society of Scotland under fire over tax haven firms

Former SNP MP Roger Mullin has previously criticised the Law Society as being "complacent" about the abuse of Scottish shell firms by criminals, especially those overseas. Last month he called for professionals, solicitors, accountants and company formation agents, to take a moral view on their clients.

He said: "This to me should be the central focus. Not whether some law has been broken, but whether firms are operating ethically in providing a base from which others can engage in evil deeds under a cloak of anonymity."

His former party colleague Chris Stephens MP has backed tighter professional regulation north of the border. He said: "The rise in the number of SLP’s is alarming, as highlighted previously by the Herald, my former MP colleague Roger Mullin, and others.

"I very much sympathise with the view that the Law Society of Scotland, and other professional bodies, should introduce a conduct rule to ensure transparency regulations are complied with.

"We need to use every lever to make it harder for fraudsters and those involved in international crime to money launder, or evade tax."

Scottish Labour’s economy spokesperson Jackie Baillie MSP stressed it was up to the UK Government to prevent the abuse of SLPs and other similar instruments. The Tories at Westminster have signalled that they intend to carry out reform, especially amid evidence that Russian organised crime figures and Kremlin-friendly oligarchs use SLPs to launder money out of the former Soviet Union.

READ MORE: Russian gang leader jailed for faking metal exports to Scotland

But Ms Baillie too urged the Law Society to look at what it could do to police Scottish solicitors providing shell firms.

She said: "It is absolutely shocking that murky companies and organised criminals are able to use Scotland as a base for their activities.

"Labour has repeatedly urged the UK Government to act against those using SLPs to avoid tax or engage in illegal enterprise.

“It is also right that our work to tackle the illicit use of SLPs should include a review of those who organise, operate and facilitate their use - including solicitors.

"The Law Society of Scotland should investigate what practical steps can be taken to help end the operation of SLPs for dubious means."

Scottish Conservative Glasgow MSP Annie Wells said: "There’s nothing wrong with the creation or existence of SLPs in themselves.

“But it does seem the system has been open to abuse, and that’s not something any of us should stand for.

"We often think murky accounts, money laundering and tax evasion are problems for other countries.

“Clearly that’s not the case, and it’s important we don’t allow SLPs to be used for questionable means."