UK companies are the common denominator to the high-profile financial crime schemes

 Question

• What’s one thing that some of the most high-profile financial crime schemes have in common?

The answer:

• UK companies.

For example

• The Azerbaijani Laundromat? UK companies.
• The Troika Laundromat? UK companies.

You get the idea…….

TI UK SAYS

The latest in this consistent trend comes via research from Transparency International UK, whose Partners in Crime report highlights the abuse of Limited Liability Partnerships (LLPs) in the UK.

• https://www.transparency.org.uk/partners-in-crime-UK-LLP-Limited-Liability-Partnership-money-laundering-press-release

More than one in ten of all LLPs ever incorporated in Britain bear the hallmarks of shell companies used for serious financial crimes.

The report found that

• Over 21,000 LLPs, approximately 14% of all LLPs set up between 2001 and 2021, share almost identical characteristics with LLPs known to have been used in major corruption and money laundering schemes –
• Related to an estimated ~$730 billion of suspicious transactions.

Suspected offences behind these transactions included

• Embezzlement of public funds,
• Bribery,
• Misuse of state resources,
• Laundering drug money, and
• Sanctions evasion.

Partners in a Crime report, Transparency International UK says:-

• The overwhelming majority of these [LLPs] were formed between 2005 and 2015, the same period as several known international ‘Laundromat’ schemes moving billions of pounds of suspect funds through the global economy…

Hope on the horizon?

As part of the report, Transparency International makes a series of recommendations under the following themes:

• Get Companies House reform right the first time
• Ensure an effective first line of defence against economic crime; and
• Create a credible deterrent against abusing UK companies for economic crime.

The report and these recommendations, particularly

• As they relate to Companies House come at a critical time, as the Economic Crime and Corporate Transparency Bill went through its second reading in the House of Commons last Thursday,
• Where MPs voiced their broad cross-parliamentary support – with the majority of contributions focussing on what more could be included.

The bill includes proposed reforms to the Companies House, introducing new powers to verify the information provided when companies are first incorporated.

https://blog.opencorporates.com/2022/10/17/transparency-international-uk-uses-opencorporates-data-to-expose-abuse-of-uk-llps/