BRITAIN’s security minister has signalled he is ready to look at ways of closing a legal loophole which has turned an obscure kind of Scottish firm into a vehicle for global money-laundering and tax evasion.

Ben Wallace confirmed he will meet ministerial colleagues to discuss what action can be taken to reform Scottish limited partnerships (SLPs), whose owners can be secret, file no accounts and pay no taxes.

The Conservative minister, a former MSP, is currently steering a new Criminal Finance bill through the House of Commons. The SNP has urged the UK Government to use the bill to review SLPs after The Herald revealed such firms were being used as fronts for gangsters in the former Soviet Union where they are openly advertised as “Scottish offshore zero-tax companies”.

Green, Labour and Liberal Democrat politicians, aid charity Oxfam and the Scottish Government have all campaigned for Westminster to reform SLPs.

Ben Wallace MP

The Herald: MP Ben Wallace

Mr Wallace made it clear he was open to change in a letter about the progress of the Criminal Finance Bill to Shadow Home Secretary Diane Abbott.

He said: “SNP colleagues highlighted how Scottish Limited Partnerships are being abused for the purposes of money laundering.

“We need to ensure the UK remains an open and good place to do business, whilst cracking down on abuse, but the cases outlined during the debate were extremely compelling.

“I will discuss this issue with ministerial colleagues to determine what action could be taken.”

The “extremely compelling” cases cited by Mr Wallace were raised by SNP MP Roger Mullin in the House of Commons. They included Herald revelations that one SLP was at the heart of a $1 billion digital bootlegging case in the United States and that others had been involved in several corruption scandals in Ukraine.

Mr Mullin, who has been lobbying ministers on SLPs, said he welcomed Mr Wallace’s letter.

Last week the SNP leader in Westminster, Angus Robertson, urged Theresa May to act on the firms during prime minister’s questions.

Mr Robertson said: “The International Monetary Fund has warned of the risk posed by SLPs in the fight against global money laundering and against organised crime.

“It is now a matter of public record that SLPs have acted as fronts for websites peddling child abuse images, and that they have been part of major corruption cases in Ukraine, Uzbekistan, Latvia, Moldova and include the arms industry.”

Mrs May defended the Government’s track record on tackling crime, pointing to the creation of the National Crime Agency - Britain’s version of the FBI - as a sign of its commitment.

Mr Wallace’s letter echoed the prime minister’s view that the UK was a global leader in the fight against corruption and stressed “almost unanimous” cross-party support for the bill’s proposed new powers, including Unexplained Wealth Orders and a new crime of corporate failure to prevent tax evasion.

The Herald has calculated that there are about 27,000 opaque entities with secret offshore ownership, some two thirds of them are SLPs.