OWNERS of Scotland's increasingly notorious tax haven firms have launched a campaign to clear their names.

Entrepreneurs across the former Soviet Union who have incorporated Scottish limited partnerships (SLPs) are protesting against a crackdown on the once rare corporate entity.

Thousands of Russians, Ukrainians and other eastern Europeans have used SLPs and similar British or overseas firms to open bank accounts in Latvia. But the Baltic state is banning so-called "shell companies" an escalation from British Government plans to better regulate the practice.

UK ministers outlined proposals to reform SLPs because they believe they are used to launder money out of Russia.

The move, which comes after pressure from US and EU authorities to stem the flow of dirty money out of Russia, has infuriated some owners of SLPs who say they are honest.

They have launched a campaign called "We are not shell" to tell their stories of how they have been treated by some of Latvia's non-resident banks, which focused on the non-Baltic former Soviet republics sometimes referred to as the Commonwealth of Independence States or CIS.


The "We are not Shell" website

Their site says: "In March 2018 banks, on instructions from government, started blocking the bank accounts of CIS citizens. The accused such companies of being ghosts. But many of them are not ghosts."

Research by The Herald - and separate work by the investigative group Bellingcat - has established that most of the acknowledged controllers of SLPs are in the former Soviet Union, especially Ukraine and Russia.

However, not all owners of SLPs, or English or Scottish limited liability partnerships are criminals. Some use the entities to protect themselves from criminals or the kind of asset grabs now commonplace across the region, where the rule of law can be weak and judges corrupt.

One SLP owner complaining about his treatment is Daulet Abyemanov from Kazakhstan. He has had an account with Rietumu banka using his SLP, Wirton Invest Corp, since 2014. Mr Abyemanov has complied with UK transparency rules and announced himself as the person of significant control of Wirton Invest. Most SLP owners have failed to do this.

Rietumu banka this week revealed that it had lost around a third of its deposits as it pulled out of its business servicing shell firms. Internet agencies have previously sold SLPs with accounts at the bank, which is one-third owned by the main shareholder in Celtic.


Dermot Desmond

Mr Abyemanov said: "In March I received notice that my agreement with Rietumu banka would end on May 21. At the same time my account was blocked with a request to undergo due diligence." Mr Adyemanov said 1000 euros was taken from his account to pay for the due diligence. This, he said, was a "glaring violation of his rights".

Another SLP owner who called himself David and had 80,000 euros in the bank same thing happened to him. Other complainers with firms registered in Hong Kong or other jurisdictions cited similar experiences with Rietumu or other banks Latvian banks, including Rietumu, have said they are refocusing on different markets than the old CIS.