What’s one thing that some of the most high-profile financial crime schemes have in common?
The answer: UK companies.
The Azerbaijani Laundromat? UK companies. The Troika Laundromat? UK companies. You get the idea – and financial crime compliance professionals won’t be surprised by this.
More than one in ten of all LLPs ever incorporated in Britain bear the hallmarks of shell companies used for serious financial crimes – according to the report.
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, the laundering of drug money and sanctions evasion.
We’re proud that the team behind the report used OpenCorporates’ data via our API to aid with entity reconciliation and to check key details of the LLPs investigated.
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 Companies House, which would introduce new powers to verify the information provided when companies are first incorporated.
We’ll be following the bill as it passes through the UK Parliament and will press for it to live up to expectations – and for it not to be watered down in the process.
Keep posted for more commentary on the analysis of the Economic Crime and Corporate Transparency Bill and its progress.