REPORT – HIDING IN PLAIN SIGHT: HOW UK COMPANIES ARE USED TO LAUNDER CORRUPT WEALTH

A Transparency International report has identified 52 global corruption and money laundering cases involving 766 UK companies.  It found that the UK is home to a thriving company formation industry which gives money launderers access to UK firms and that the UK’s system to defend against this is failing to prevent the abuse of UK companies.   It found 766 companies registered in the UK that have been directly involved in laundering stolen money out of at least 13 countries.  These companies are used as layers to hide money that would otherwise appear suspicious, and have the added advantage of providing a respectability uniquely associated with being registered in the UK.  It also reports that trust and corporate service providers (TCSP) that form and administer companies have a poor track record of identifying and reporting money laundering with only 77 of the 400,000 SAR filed in the UK last year coming from this sector.

Key statistics:

  • 766 UK companies involved in 52 corruption and money laundering cases worth up to £80 billion

o   those 766 companies could have cost a total of just £15,000 to set up

o   one quarter of these are still active today

o   half of these registered to just 8 different addresses

  • Just 6 staff in Companies House police the integrity of some 4 million UK companies
  • TCSP filed just 77 of the 400,000 SAR last year, which are designed to flag possible money laundering.

Key recommendations:

  • prohibit non-UK registered agents from setting up companies to avoid TCSPs with no presence in the UK, and circumventing UK AML checks
  • use financial incentives to encourage UK companies to hold a UK bank account, discouraging the use of offshore bank accounts
  • provide Companies House with sufficient resources to identify suspicious activity
  • the UK Government should seek to apply a “failure to prevent” approach to money-laundering, meaning TCSP are held more accountable for forming companies that are used to launder money
  • overhaul the UK’s AML system

http://www.transparency.org.uk/press-releases/revealed-britains-own-applebys/#.WgVCkbp2tZU

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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