A year ago a giant big international finger was pointed at Scotland.
The country was named in a major investigation in to what was one of the biggest and most daring bank heists ever, the theft of $1 billion from Moldova.
Companies based here, an independent report established, were used as part of an elaborate global conspiracy to funnel money from the tiny and impoverished former Soviet republic.
Yet the firms involved – a score or so of them – practically only existed on paper. Their headquarters, as our sister paper, The Sunday Herald, revealed, turned out to be modest homes in schemes in Edinburgh or Inverness.
This, in the late spring of of last year, was the first real public sign of what had long been advertised in eastern Europe as "Scottish offshore companies".
However, unlikely it may seem, Scotland was suddenly seen to be ranking alongside Panama and the British Virgin Islands as a jurisdiction that could be exploited for tax evasion, tax avoidance and, crucially, money-laundering.
As a country we are lending our reputation for probity and our status as part of the EU to spivs, gangsters and kleptocratic politicians from overseas.
I think this is a big deal. And I think we should be very worried about it. Because it leaves Scotland – and its legal and corporate systems – vulnerable to corruption and international criminality.
So how did this happen? And what can we do about it?
Well, Scotland became a de-facto tax haven thanks to a combination of UK-wide laissez-faire companies registration and a specific eccentricity of a century-old Scottish-only corporate law.
First, on company registration. Britain, it seems to me, barely bothers to police companies. Companies House will publish corporate details but firms of a variety of kinds can go years without publishing accounts, especially if they claim a small firm exemption or say they are dormant. Checks on the veracity of documents are rare. This is a long-standing bugbear, in private, at least, of Scottish detectives.
Second, since 1907 we have had Scottish limited partnerships or SLPs that, unusually, have legal personality. That means they can own assets and borrow money. Provided they are owned by partners registered overseas and do no business in Scotland, they can effectively operate tax-free with minimum transparency accountancy.
Thus we have what adverts in the former Soviet press call "Scottish zero-per-cent-tax companies".
Some company formation specialists – essentially factories making off-the-peg Scottish offshore firms to be sold as shells in countries like Ukraine – are firmly in the crosshairs of law enforcement. But there is a limit to what the police and tax authorities can do. Any alleged criminality is abroad.
That does not mean the criminals are abroad. Lured by our lax systems, they are seeking redress in our courts and looking to invest their profits in our property market.
What can Scotland do? Well, company law is reserved. The Scottish Parliament cannot repeal the 1907 law which created SLPs. The SNP, Greens and Labour have all expressed concerns. But a year after the Scotland was partly blamed for the looting of Moldova, can we expect Scottish MPs to lead calls for reform in Westminster?
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