TWO Scottish shell firms are at the centre of a £2.2 billion money-laundering investigation from Azerbaijan.

The businesses - both limited partnerships or SLPs registered in Glasgow - along with two English companies were used to flush cash out of the oil-rich former Soviet republic.

Laundered money, The Guardian reported, was used to buy luxury goods, pay off Western politicians and act as a slush fund for those close to the Azeri regime.

The cash flows were uncovered by the Organised Crime and Corruption Reporting Project or OCCRP. They have called the payments the Azeri Laundromat. Previously they revealed the even bigger Russian Laundromat, worth at least $20bn. 

A joint investigation with The Herald found some $4bn of that cash had gone through Scottish-registered entities, mostly SLPs.

The Herald:

Their new findings revealed that four firms, including the Glasgow-registered Hilux Services LP and Polux Management LP, formed a core part of over 16,000 transactions made by the ‘Azerbaijani laundromat’ between 2012 and 2014.

The SLPs and two English LLPs were controlled through opaque offshore companies.

Transparency International UK and other campaign groups have long-warned that SLPs were a "home-grown secrecy vehicle" and that other British firms were also vulnerable.

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Duncan Hames, of Transparency, said “Knowing that UK registered companies were at the heart of a scheme that saw £2.2 billion stolen from Azerbaijan underlines just how damaging it is to be complicit in global corruption.

"These sums of money can be the difference between life and death for people around the world, and to know that they are instead being used to purchase luxury goods, line the pockets of corrupt politicians and improve the image of dictators, is particularly galling.”

Duncan Hames

The Herald: Duncan Hames

“We are increasingly concerned that action on the promises made by successive governments to close the loopholes that make the UK attractive to money laundering, appears to have stalled. We have seen some regulatory change but it has gone from a core government mission to uncoordinated and piecemeal efforts.”

“We’re calling on the UK Government to immediately enforce new laws to end the use of British companies as the getaway vehicle for corrupt individuals and organised criminal gangs.

"Much more than lip service is needed to fight global corruption. If a success is to be made of Brexit, the UK must uphold the highest standards of commerce and not end-up reducing itself to an offshore centre exposed to the risk of serving corrupt and repressive regimes from across the globe.”