UNREGULATED internet money transfer systems are using Edinburgh shell companies as fronts amid growing concern over money-laundering in the industry.
At least three websites offering no-questions-asked online payments are using a controversial kind of Scottish firm whose ultimate owners can be secret, file no accounts and pay no taxes.
The businesses, called epay, wpay and payeer, all give their corporate face as a Scottish limited partnership or SLP registered at a maildrop in the capital’s prestigious west end.
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However, none of the three firms have any physical presence in Scotland beyond their virtual “brass plate” in Edinburgh and none are subject to UK regulation.
Nationalist MP Roger Mullin has urged the ultimate owners of the three payment systems to declare themselves and show what they do to prevent their websites being abused by those who wish to clean dirty money.
He said: “Money-laundering is a major problem in the UK. I am particularly concerned there are unregulated payment systems using SLPs and Scottish addresses. I would urge the owners of such systems to make themselves known and show how they comply with UK anti-money-laundering guidelines.”
Mr Mullin has been campaigning for reform of SLPs in Westminster, which created the once obscure corporate entity more than 100 years ago. The UK Security Minister, former MSP Ben Wallace, last week signalled he was ready to look at potential action.
The Herald has calculated that SLPs, widely marketed across Eastern Europe as vehicles for corporate secrecy and tax avoidance, now account for two out of three of the roughly 27,000 British firms owned by opaque shareholders in traditional tax havens.
The websites wpay and epay give their corporate details as two SLPs, Fire Pay and Nerova respectively, at the same address in St Vincent Street, Edinburgh.
Multi-lingual wpay says it offers a “high level of privacy” for its clients while epay, which is accessible to users only in English and Russian, says it provides “identity masking”.
The Herald emailed both sites asking who their owners were and how they complied with UK anti-money-laundering guidelines. They did not respond.
Payeer, meanwhile, says it is regulated in Georgia but its website gives its corporate address as an SLP called Akkord Welt registered at the same Edinburgh virtual office as wpay and epay.
Unusually for an SLP, Akkord Welt has had a named individual as a partner, Yelena Kulbikova. She has been named by Ukrainian investigative news site Crime.ua as the director of a construction group that works for the KGB’s successor.
The Herald asked Payeer to comment. The business, in an unsigned response, said: “We only have a virtual office now. Akkord Welt is not active. There have not been any official news reports about Payeer or Akkord Welt in Ukraine. We don’t have any connection with either criminality or the Russian security services.”
Payeer was subject to a now withdrawn warning from the Financial Conduct Authority (FCA).
UK regulators, including FCA, made no comment. Robert Palmer, of campaign group Global Witness, said: “The secrecy around who owns SLPs is a perfect smokescreen for anyone with something to hide. In the worst cases, the UK ends up providing the getaway car for crime and corruption.”