SNP ramp up pressure on Tories to tackle corporate money laundering

Yesterday, the SNP’s Treasury spokesperson, Alison Thewliss MP, submitted the SNP’s consultation response that sets out two keys demands: that the UK Government introduce a robust and transparent system of company registration in order to combat money launderers’ attempts to register entities for illicit purposes; and, that the UK government must act to tackle the ongoing, improper use of Scottish Limited Partnerships (SLPs), via proper reform of Companies House.

The extent of the abuse of the current system was laid bare in the recent Global Witness report, ‘Getting the UK’s House in Order’, which highlights severe deficiencies at Companies House – the UK’s registrar of companies – in compliance with ownership regulations. Of particular note is the extent of missing information and inaccuracy throughout the Persons of Significant Control (PSC) register – a mechanism to collect information on all persons and corporate entities with significant control of a business or company.

The SNP has led the fight against money laundering and tax avoidance and evasion at Westminster, in particular the misuse of SLPs to hide the beneficial ownership of organisations and assets. Ms Thewliss has said that “abuse is enabled, in no small part, by the lack of proper checks by Companies House.”

The current system allows those with intent to conceal or deceive to easily do so by registering, effectively, in secret, as a SLP. These financial vehicles have ‘legal personality’, meaning that agreements can be made by individuals in the name of the financial product, without ever having to name the person or people who control it.

Alison Thewliss MP said: “This consultation response is another step forward in the SNP’s campaign to clamp down on money laundering – the UK government must respond to the consultation without delay and set out the steps it will take to create a robust and transparent system of company registration and tackle the abuse of SLPs.

“The limited scrutiny by Companies House when registering an entity is cause for concern - it is baffling that anything else, such as a tax return, a passport application or a driving licence application, is required to go through the UK government’s verification scheme, but Companies House does not have similar requirements. Tightening up the rules would help to ensure both the accuracy of information and to clamp down on those who wish to abuse the system.

“SLPs have been used for years to funnel millions of pounds of dirty money created by illicit business activities – enabled, in no small part, by the lack of proper checks by Companies House - and the Tories have consistently failed to take the tough action needed to stop this. We know that the links between SLPs and criminality pose a threat to combatting organised crime yet the Tories have done nothing.

“It is time the Tories sat up and took stock of the scale and extent of criminal activity linked to the lack of proper checks by Companies House and abuse of SLPs. Only by doing so can they put forward a practical and effective solution that will adequately tackle the problem”.