A SCOTTISH shell company was used to transfer £160 million out of Russia, according to international corruption investigators.
Progate Solutions was named in the latest release of data on allegations that British firms and banks have been used to launder billions from the former Soviet Union.
The firm is one of thousands of controversial Scottish limited partnerships (SLPs) set up over recent years with anonymous shareholders in traditional tax havens.
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The UK Government is currently reviewing such corporate vehicles, which can have secret owners, pay no taxes and file no accounts, after The Herald named scores involved in everything from corruption in Ukraine’s arms industry to unlicensed payment systems.
Progate Solutions was highlighted by the Sarajevo-based Organised Crime and Corruption Reporting Project (OCCRP) as part of their ongoing investigation into what they have dubbed the Russian “Laundromat”: the industrial-scale transfer of £16 billion out of Russia between 2010 and 2014.
Today, The Herald is printing the names of another nine SLPs exposed by OCCRP.
Table: Top 10 SLPs named by OCCRP
BACKGROUND: Role for Scots bases in Russia ‘Laundromat’
Progate Solutions no longer exists but was registered first at the Mail Boxes Ltd in George Street, Glasgow, and then at an address in Morningside, Edinburgh. It was set up with the help of an agency in Cyprus on behalf of opaque corporate parties. There is no suggestion that the agency concerned could have had knowledge of what it was to be used for.
The Glasgow mail drop where Progate was first registered
Several of the other SLPs named in the Laundromat investigation were set up by Cypriot agents, including Janford Estate, which has been linked to transfers of more than £27m.
However, the Scottish firms are part of a much-larger network for moving money – often believed to be linked to the rich and powerful in Moscow – out of Russia, sometimes using British banks.
Financial institutions named by the OCCRP included Edinburgh-based Royal Bank of Scotland, as well as Lloyds, HSBC and Barclays, raising concerns with politicians across the UK and prompting questions in the House of Commons.
SNP MP Roger Mullin - who led campaigns for a review of SLPs in Westminster - described the allegations as “shocking, but...not in the least bit surprising”.
Mr Mullin urged ministers to re-open their review of limited partnerships, which closed last week, and to create ways to “encourage, not inhibit” whistleblowing in banks.
Roger Mullin MP
Shadow chancellor John McDonnell accused the UK Government of “complacency and inaction” as he called for reassurances that publicly-owned banks, such as RBS, were not directly involved in criminal activity.
Conservative MP Jake Berry said that it would be a “national disgrace” if RBS was found to have taken part.
Fellow Tory MP Jonathan Djanogly called for an end to what he said was the “an unwritten deal” that Russians of “dubious or illegal means” who come to live and spend money in the UK will not be prosecuted if they stay out of trouble.
City Minister Simon Kirkby told MPs that the allegations about UK banks, printed by The Guardian, would be assessed “closely”.
He said that the Financial Conduct Authority and the National Crime Agency “take any such allegations seriously and will investigate closely whether recent information from the Guardian newspaper regarding money laundering from Russia, or indeed any other media source, would allow the progression of an investigation.”