By Alison Thewliss, SNP MP for Glasgow Central

CREDIT is due to David Leask of The Herald, campaigner Richard Smith, and my former colleague Roger Mullin for the actions they have taken to shine a light on the dark and murky world of Scottish Limited Partnerships (SLPs). Fixing SLPs should be a no-brainer; close the loopholes and the ability of nefarious individuals to exploit these vehicles would be removed. Unfortunately, the UK Government isn’t making it that simple.

The Sanctions and Anti Money Laundering Bill ought to have been the perfect opportunity to tackle the issue. The UK Government launched a call for evidence on SLPs on January 16, 2017, which closed on March 17 last year. There seems to me to be no reason why the findings could not have been incorporated into the bill. Despite scrutiny, the UK Government seemed unwilling to publish the results. Then, in a sudden spurt of activity, it was announced recently that action is going to be taken, trailed as a “crackdown on abuse of UK businesses for foreign money laundering”.

Unfortunately, the detail is uninspiring; what we are being offered is a consultation on the previous consultation with some vague promises for future action “as soon as Parliamentary time allows”.

Person of Significant Control regulations, which attempt to tie SLPs to a person, are welcome, but the enforcement has been woeful with not one single fine issued for failure to comply. This is primarily down to a lack of capacity at Companies House, and until this is tackled, the UK Government will continue to leave the door wide open to those who wish to game the system. Likewise the proposal for powers to strike off SLPs from the companies register – there must be a proper resource in place to police the register before it will actually work.

The UK Government’s suggestions for tackling abuse of SLPs are a step in the right direction. There is scope in the proposal to ensure company formation agents setting up SLPs are compliant with Anti Money Laundering regulations. There is no confirmation, however, whether this will be limited to Trust and Company Service Providers in the UK – if not, then those working in less compliant jurisdictions may continue to flout the rules.

Likewise, the Governments suggest that SLPs should be connected in some way to the UK via a principal place of business rule. This is currently being abused with hundreds of SLPs registered to single mailbox addresses in Scotland. A link, as the SNP suggested in its amendments, via a UK-based bank account would be a better means of achieving this while protecting legitimate business, but the Government clearly isn’t interested.

The UK Government press release announcing the proposals said there is “growing evidence 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.” This ought to be sufficient to act now, but instead we must wait until this next consultation concludes on July 23 – incidentally the day before the House of Commons goes on summer recess.

While all this has been going on, money laundering through SLPs has continued unabated. The UK Government had an opportunity this week to accept our amendments and strengthen regulation, which they shamefully ducked. They must now bring forward a timetable with real actions if they are serious about tackling the scourge of dirty money on our doorstep.