UK Plans to Scuttle Loophole Used for Money Laundering

Опубликовано: 30 Апрель 2018

Big Ben ImagePalace of Westminster in London (Photo Credit: Pexels)

The United Kingdom announced that it plans to close a 100 year loophole to stop the flow of dirty money through the country, British media reported on Sunday.

Introduced in 1907 to assist Scottish farmers, the Scottish Limited Partnerships (SLPs) are now an alleged tool for money laundering by foreign investors.

Those opening SLPs will have to prove a connection to the UK and run a business in Scotland. Right now, anyone can register an SLP, according to the Independent.

The Department for Business, Energy, and Industrial Strategy is set to begin on Monday consultations on how to actually close the loopholes.

“The UK is admired around the world as a leading light in the global fight against money laundering,” Business Minister Andrew Griffiths wrote in the Herald.

“We will enhance that reputation further and create an even more hostile environment for those eyeing up UK shores as a place to move their illicit funds by setting out plans to prevent the abuse of the financial instrument known as [SLPs].”

The Herald began investigating SLPs in 2016 and found that they serve as “a financial bridge” often times for so-called investors in the former Soviet Union and tax havens. Investors can then open bank accounts across the European Union.

SLPs can hold assets, borrow money from banks, and enter contracts while not having to disclose their owners’ identities, allegedly making them ideal for organized crime groups.

Investigative reporting by OCCRP found that 113 SLPs played critical roles in the massive Russian Laundromat money laundering scheme that moved US$20.8 billion out of Russian banks between January 2011 and October 2014.

In 2017, some 17,000 SLPs had been registered among only 10 addresses.

"For some time we have called on the UK government to tighten the regulatory framework around Scottish Limited Partnerships,” a spokesperson for the Scottish government said, according to the BBC. "This is a complex landscape and we await with interest the detail of any additional new measures, following the wider review into limited partnership law.”

The announcement also comes as the UK attempts to crackdown on alleged money laundering of Russian investors, especially in the wake of the poisoning of Sergei Skripal and his daughter in Salisbury, England.

In March, the UK government introduced “unexplained wealth orders” to investigate properties with suspicious financial connections.