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New announcements to target corrupt money will depend on resources made available

10th December 2018, London – A set of welcome new announcements from the Government on cracking down on the abuse of Limited Partnerships (LPs) as vehicles for corrupt money will depend on pending reforms to Companies House, including whether enough resources will be made available to enforce these changes.

Today the Government has announced a set of measures that include ensuring only regulated professionals can form LPs, including Scottish Limited Partnerships (SLPs) that we have previously described as “the UK’s home-grown money laundering vehicle”. For this to be effective those professionals must be subject to regulation by competent bodies that will raise anti-money laundering standards in the sector.

As part of this announcement the Government has also said:

  • Companies House will have the power to strike off Limited Partnerships that are no longer active – reducing their number and therefore making it easier to discover which LPs are being abused for criminal activity
  • A commitment to review the role of Companies House in protecting against the abuse of UK registered companies
  • Limited Partnerships must confirm annually the data held about their controlling partners is correct – providing greater confidence in the accuracy of the register.

Our previous research found over 100 SLPs were set up to help launder billions of pounds as part of the “Global Laundromat”, which was exposed by investigative journalists at the Organised Crime and Corruption Reporting Project (OCCRP). In order for these proposals to have the desired effect of limiting options for criminals to use UK companies to launder stolen wealth, they need to be accompanied by further reforms to Companies House – the body that oversees company registration in the UK. The UK Government should give Companies House statutory powers and the resources to verify information submitted to it.

Duncan Hames, Director of Policy at Transparency International UK, said:

“SLPs have seemingly become synonymous with illegal activity, acting as home-grown money laundering vehicles. Having called for action since reporting on these schemes some 18 months ago, we very much welcome this latest announcement that targets the abuse of UK companies by criminals. The recent scandal at Danske Bank has once again brought international attention to the role of UK companies in global economic crime.”

“Implementation will be key to ensuring these proposals are effective in practice. It’s all very well saying that those incorporating Limited Partnerships need to be subject to supervision by regulated professionals, but in practice that means nothing if the regulators aren’t up to challenging those enabling money laundering either here or abroad. Our research has found bodies overseeing compliance with anti-money laundering rules to be opaque and ineffective. This needs to change urgently if these proposals are to be more than just words of good intent.”

“Companies House and the UK’s public company register play a vital role in preventing companies registered here from being abused by money launderers. We hope the forthcoming review and subsequent reforms result in Companies House being given the resources and statutory powers needed to counter the money laundering threat it faces.”

***ENDS***

Contact:
Dominic Kavakeb
020 3096 7695
079 6456 0340
Dominic.kavakeb@transparency.org.uk

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Read 109 times Last modified on Monday, 10 December 2018 17:56

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