The UK Government has announced reforms of Scottish Limited Partnerships to prevent them from used to launder dirty foreign money through the UK.
Scottish Limited Partnerships (SLPs) and Limited Partnerships (LPs) are used by thousands of legitimate British businesses, particularly the private equity and pensions industry, to invest more than £30 billion a year in the UK. SLPs and LPs are business entities created by two or more partners where at least one partner is liable for what they invest.
However, evidence has shown that SLPs have been exploited in complex money laundering schemes, including one which involved using over 100 SLPs to move up to $80 billion out of Russia. They have also been linked to international criminal networks in Eastern Europe and around the world, and have allegedly been used in arms deals.
The consultation seeks views on a number of reforms to ensure SLPs can continue to be used as a legitimate vehicle for investment and enhance the country's world-leading business environment.
The proposals would make it clearer who runs limited partnerships to enable British investors to continue to use them legitimately and invest in the UK while cracking down on their use in unlawful activities. These include:
- requiring a real connection to the UK, including ensuring SLPs do business or maintain a service address in Scotland
- registering new SLPs through a company formation agent, meaning frontmen will be subjected to anti-money laundering checks
- new powers for Companies House to remove limited partnerships from the company register if they are dissolved or are no longer operating.
If you have been charged with a financial crime, including money laundering, then contact our specialist criminal defence lawyers today