SOMETIMES reporters say events are ‘seismic’ even when they are not. Well, last year’s horrific blast in the port of Beirut really was. The bang – it was one of the biggest non-nuclear explosions ever recorded – was so huge it measured at up to 4.5 on the Richter scale.

Around 200 people died, mercifully few given the sheer scale of the humanitarian disaster. But something like another 300,000 souls were displaced from their homes.

Lebanon, which has other problems too, is nowhere near recovering from the blow. Its instability is now an international security threat.

Even amid a global pandemic, this was an event which radiated shockwaves, real and metaphorical.

Beirut’s tremors, politically at least, reach our shores. They raise serious questions about corporate secrecy in the UK – and especially Scotland.

Let me explain how.

This month, an international team of investigative journalists identified who they thought owned the abandoned chemicals which ignited in a dockside warehouse, causing all that death and destruction.

The Organized Crime and Corruption Reporting Project or OCCRP named a Ukrainian businessman called Volodymyr Verbonol as being responsible for the cargo, which had been offloaded from a ship unsafe to sail. Mr Verbonol has denied any connection.

To get to him, OCCRP investigators had to peel away layers of corporate opacity created in Cyprus – and the UK. They found the entrepreneur behind a complex network of companies, including a limited company in London called Savaro Ltd and two Scottish limited partnerships or SLPs called Savaro LP and Savaro Europe LP registered at an industrial state in Newton Stewart. Both were dissolved earlier this year.

Their official ownership – as with so many SLPs – was entirely opaque. Savaro Ltd is being sued over the blast in London. We’ll have to wait the outcome of that litigation: the Beirut blast story is a tangled mess that may take years to unravel.

However, the OCCRP investigation once again reminds us of the continued global ubiquity of SLPs, not least in Ukraine where they remain a favoured way to get a respectable-looking “offshore company” and a bank account to go with it.

Transparency International calls such shell firms “Britain’s home-grown secrecy vehicles”.

After a series of scandals – including the multi-billion-dollar Russian and Azerbaijani Laundromats where SLPs were at the heart of a global machinery to clean dirty money – the Conservatives at Westminster pledged to reform Scots partnership law, which is reserved.

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So far they have only introduced some simple changes under which SLPs have to reveal their beneficial owners, in theory, if not practice.

This, along with moves in the Baltic states to refuse to give SLPs bank accounts, may have reduced the popularity of the structures. But SLPs still abound. And many of their real owners are circumventing the well-meaning but soft-touch Tory attempts to force transparency. Easily so, in fact.

Take whoever is behind some of the biggest investments in Uzbekistan. They are secret – thanks to SLPs. The Herald has uncovered mysterious Scottish firms in the Central Asian nation before. The World Bank and UN have blacklisted some after aid procurement scandals. Yet such entities from north of the border just keep on surfacing in various probes.

This month, human rights investigators published a report on who controls a major conglomerate called the Orient Group linked to the first family of Uzbekistan. This network of businesses has thrived in recent years – scooping the lion’s share, for example, of investments from a sovereign wealth fund. Its founders include the brother of the son-in-law of the president of Uzbekistan, Shavkat Mirzoyoyev, according to UzInvestigations, a joint venture of criminologists at the University of Ulster and the Berlin Uzbek Human Rights Forum.

UzInvestigations, however, were unable to uncover the owners of $138m worth of equity shares in Orient Group companies. Why? They were held by eight SLPs with entirely opaque ownership. Orient Group has not responded to questions about this. UzInvestigations stressed that opacity is not evidence of wrongdoing in this or any other case but called for a formal investigation of the SLPs in the UK and of Orient Group in Uzbekistan.

“Opaque legal forms like SLPs are the balaclavas of financial crime and corruption,” said Kris Lasslett of UzInvestigations, a criminology professor at the University of Ulster, speaking generally. “Recent reforms in the UK have improved corporate transparency, but until corporate service providers, banks, lawyers, accountants and auditors feel the sharp end of AML related laws they will continue to service gold collar clients laundering their dirty assets with little risk or consequence.”

The Tories do plan further reforms – and say they want to beef up the investigatory powers and resources of Companies House, Britain’s Corporate Registry. Some anti-corruption campaigners are sceptical about the scope of Conservative proposals. They are certainly not happy about the pace of their introduction.

After all, SLPs may be the most notorious of Britain’s shell companies. But they are

not the only kind of UK partnership or company open to abuse.

Overseas, there is tangible irritation with British authorities over this. “It is deeply frustrating that the elite of authoritarian countries such as Uzbekistan are able to extend their privileges to exploit the UK system of partnerships to hide their wealth,” said Umida Niyazova, director of the Uzbek Forum for Human Rights.

SNP politicians have been at the forefront of calls for an SLP crackdown. Some pricklier online pro-independence voices, however, suggest criminal or unethical SLPs are not really “Scottish” at all. Alas, they very much are. They are made and hosted in Scotland and there are Scottish interests lobbying against more radical reform. Why? Because SLPs are also legally tax-efficient vehicles for equity funds. English Tories – to be blunt – are not forcing Scottish people to enable criminals and kleptocrats.

There are difficult cultural questions here which many of us have been avoiding for years. Me? I think SLP and wider shell firm abuse is a “seismic” problem undermining Scottish and UK business even if many of us choose to ignore the the geological-scale damage it does far away and the rumbling aftershocks under our own feet.

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