Scotland's most notorious "secret firms" owe theoretical fines of £2 billion for failing to reveal their owners.
New figures obtained by Labour have once again underlined how few Scottish limited partnerships or SLPs are complying with basic anti-money laundering rules imposed last year.
The firms, dubbed Britain's home-grown secrecy vehicle, have turned in to the equivalent of a numbered Swiss bank account for gangsters and corrupt despots around the world - including those close to Vladimir Putin's Kremlin - and are expected to be banned.
UK ministers have signalled they will kill off the corporate entity after a three-year campaign of investigative journalism from The Herald their industrial scale abuse.
Thousands of them have failed to name their owner, a person of significant control (PSC), and are therefore liable to fines of up to £500 a day beginning in June. If they were all successfully prosecuted, they would have to pay £2.2 billion.
Labour MP Annaliese Dodds asked the UK Government how many of the official 29,709 registered SLPs had complied with PSC rules. The number was 12,897. That means just 43 per cent are compliant. None have been prosecuted.
Scots-born Ms Dodds said: “This is yet another sign of the Government failing to take action on money laundering.
"Time and again we are finding instances where the Government introduce legislation but fail to properly resource authorities so that they can take action.
"We need immediate and powerful action to stop the flow of dirty money from Russia and elsewhere into the UK and that starts by shining the light of transparency on dodgy corporate vehicles like SLPs.”
“Only two weeks ago we discovered that no prosecutions had been brought forward as a result of the 2017 criminal offence for failure to prevent money laundering. This is another advert to oligarchs and crooks that the UK is open to business due to the Conservative Government’s failure to use their powers.”
“The Government must begin collecting the up to £2.2bn owed in fines, as taxpayers are continuing to lose up to £8.4m each day that action is not taken.”
Scottish Labour’s economy spokesperson Jackie Baillie MSP said: “These are deeply troubling revelations.
“It has been clear for some time now that SLPs could be used for dubious purposes, including laundering illegal Russian funds.
“It is welcome to see reports today that the UK Government is considering clamping down on SLPs, but the reality is this should have happened years ago.
"And where there is legislation already in place, it needs to be robustly enforced. At a time of austerity, not collecting fines of £2.2 billion is extraordinary, and sends the wrong signal to these dodgy companies.
“We need to see urgent action from the UK Government to stop SLPs being used for dubious purposes and improve transparency surrounding them.”
Jackie Baillie
Tracing the owners of non-compliant SLPs would be extraordinarily difficult, according to researcher Richard Smith.
Many may still be registered whle not functioning. And, as The Herald revealed this year, some SLPs - zombie firms - can be dissolved before being revived with limited paperwork. The Government figures obtained by Ms Dodds may not, therefore, be entirely reliable.
Our research showed only one in a dozen of Scotland’s increasingly notorious “tax haven” shell firms had named a real person as its owner under new transparency rule by September.
More recent research carried out by investigative group Bellingcat this month discovered a similar pattern.
Its study of relative new SLPs - those created in 2017, found Ukraine could claim the largest number of individuals named as PSCs, followed by Russia and then Belarus.
The Herald's Analysis of SLPs, different to government, as of September 2017
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel