America has imposed sanctions on three Scottish shell firms it believes are being used to aid Russia’s war effort.
 
United States authorities formally listed the Edinburgh-registered limited partnerships or SLPs earlier this year.
 
They did so as part of a crackdown on a Swiss financier who they - and the British government - accuse of helping the Kremlin.
 
The specific sanctions on the SLPs were not publicised when they were imposed because they were parts of bigger packages of measures against Vladimir Putin’s regime.
 
But they once again highlight just how often SLPs - once dubbed “Britain’s home-grown secrecy vehicle by Transparency International - are abused by bad actors.
 
The three SLPs are called Kraverton, Saling Development and Walmart Group.
 
They all declare 54-year-old Swiss Anselm Oskar Schmucki as their person of significant control, according to filings at Britain’s corporate registry, Companies House.
 
The US, UK and Ukraine all believe the Emirates-based financier has been supporting the Russian war machine.
 
America’s Office of Foreign Assets  Control announced sanctions against Shmucki and corporate entities linked to him, including the SLPs, in May. There is no suggestion that registration agents knew what the SLPs they were setting up and hosting were being used for.
 
“Schmucki controls a global network of shell companies and has had close financial relationships with an individual charged with financial crimes and a company with suspected links to Russian organised crime and money laundering,” it said. “Schmucki has also facilitated the sale of tens of millions of dollars of gold bullion.”

The UK added its own sanctions against Schmucki - but not his SLPs - in August as part of a major package of measures against the Kremlin.

Read more: Revealed: Scottish "ghost firms" funnelling dirty money into Russia

In an official statement it said the Swiss had been “supporting the government of Russia by carrying on business in a sector of strategic significance, namely the Russian financial sector”.
 
Schmucki had headed the Moscow office of a Swiss asset management firm called DuLac. Back in August that company said he had left the business some months earlier.

Welmart Group LP is officially headquartered at a mail drop business in Edinburgh’s Rose Street. In its last filing, dated June of this year, it said its partners had decided not dissolve the firm.
 
However, the other two sanctioned SLPs  linked to Schmucki are officially dissolved.
 
Kraverton was also registered in Rose Street. It was formally wound up in June 2021.
 
Saling Development, registered in Queen Street, Edinburgh, was dissolved in May 2018.
 
SLPs can be easily reanimated after dissolution and have frequently been found trading despite formally not existing on paper.
 
Schmucki’s corporate empire included businesses registered in Russia, Malta, Cyprus, Singapore and Estonia.
 
He had a Hong Kong-based firm called Welmart Group Limited which the US officially described as “an apparent shell company likely used by Schmucki to purchase diamonds”.

The Herald: Russia Ukraine War
 
A company called Welmart Group Limited was one of the original partners of the Welmart Group LP when it was first incorporated in 2016 Partners in the SLP are now individuals with Russian names.
 
Neither Welmart Group LP or Welmart Group Limited has any relation to the US supermarket giant Walmart.
 
All three of Schmucki’s SLPs were presented for registration by a London company formation agency, LAS International, which specialises in servicing clients from the former Soviet Union.
 
Ukraine, The Herald can reveal, earlier this year also sanctioned an SLP, Leisure Marine, still officially trading from its virtual office in South Charlotte Street, close to the official residence of Humza Yousaf, first minister. Its person of significant control is a Moldovan national.

Last year the United States sanctioned another SLP, Djeco Group, based at the same address as Leisure Marine. Its person of significant control is a Moldovan national.
 
As revealed by Scotland on Sunday, the firm was one of 92 blacklisted “based upon their involvement in, contributions to, or other support of the Russian security services, military and defence sectors”. Djeco is still officially trading.

Read more: Energy bills of Scots councils revealed as good value for taxpayers
 
There have been numerous cases of Scottish and other UK shell companies being used to bust sanctions, including supplying occupied Ukrainian territories. SLPs, for example, were used to own ships running the blockade on Crimea, the Ukrainian peninsula seized by Russia in 2014.
 
SLPs, usually nothing but a PO Box address attached to a bank account, have been ubiquitous across the former Soviet Union for more than a decade. They were widely marketed as “zero-tax Scottish offshore companies” and sold for as little as £1000 off the shelf.
 
There were ready-made SLPs for sale this week by UK company formation agents. Such businesses usually have partners in traditional tax havens and do not routinely have to file accounts.
 
SLPs are also used legitimately, usually in complex equity and pension funds. These tend to have more transparent ownership structures.


 
Bellingcat, the news site which pioneered open-source investigations, last month found UK partnerships, mostly SLPs, had been named as intermediaries in 17,000 Russian import transactions between Vladimir Putin’s full-scale invasion on February 2022 and the end of this March.
 
Crucially, Bellingcat identified that more than 600 of these shipments featured supplies were what the European Union and its partners flag as “‘High Priority’ battlefield components, potentially dual-use and sanctioned items”.

Alison Thewliss, the SNP MP for Glasgow Central, has been campaigning for the reform of SLPs and other British corporate entities.
 
The UK Government is in the process of introducing tougher transparency rules for partnerships. But Thewliss stressed that firms like those sanctioned were created, registered and hosted by Scottish and other British corporate service providers.
 
“Opaque structures such as SLPs clearly lend themselves to nefarious actions like sanctions busting,” she said.
 
“It should worry us all that the UK has become known as a place where such companies can be set up and abused under a veneer of respectability.
 
“For example, the sanctioned Saling Development LP, with a sanctioned controller, Anselm Oskar Schmucki,  is based at a mailing address in Queen Street in Edinburgh along with hundreds of other companies.
 
“This is being facilitated by professional enablers right here in the UK.
 
“Given the volume of dubious shell companies registered with Companies House, identifying those seeking to evade sanctions, protect their ill-gotten gains, and engage in trade based money laundering is like finding a needle in a haystack.

"That instances are still coming to light via the work of investigative journalists two years after the Russian escalation of the conflict in Ukraine shows there is much more work to be done on this issue.”

This is Part Two of a three-part series by David Leask on Scottish "ghost" firms being used to funnel dirty money into Russia. You can read Part One here and the final part in The Herald on Monday.