By Alison Thewliss, SNP MP for Glasgow Central

THE UK Government’s long-awaited response to the consultation on reform of Limited Partnerships (LPs) finally arrived this month. Published without fanfare, and competing – unsuccessfully – for column inches with all things Brexit, the response will leave many anti-corruption campaigners now challenging the maxim that “good things come to those who wait”.

We have waited for nearly two years for ministers to draw up plans to curb the blatant abuse of LPs, comprehensively detailed by The Herald, and campaigners like Richard Smith and Transparency International. To say that the package of reforms now on offer is underwhelming is something of an understatement.

Amongst the recommendations is a proposal to ensure that those registering LPs can demonstrate that they are registered with an official anti-money laundering (AML) supervised agent, such as an accountant or lawyer. Whilst this sounds promising, the bigger picture around enforcement is sorely lacking. Companies House remains powerless to enforce sanctions for non-compliance due to inadequate resource and lack of formal AML responsibilities, so it matters very little whether LPs are registered with an agent. A loophole to allow registration with overseas agents with potentially lower AML standards remains wide open.

It’s similarly discouraging that ministers have taken no action to obligate LPs to register a UK bank account within three months of registration – a move that would automatically integrate existing due diligence measures aimed at reducing the risk of money-laundering. Strangely, in an attempt to ensure a link to the UK is maintained, the Government has recommended that LPs have a principal place of business in the UK. This is a requirement that all LPs – fraudulent or otherwise – have been able to satisfy simply by having an inconsequential mailbox address. This move changes nothing, and casts doubt on whether Ministers have proper cognisance of the issues at hand.

In addition, the UK Government has made much of its recommendation to force LPs to submit a confirmation statement every 12 months to Companies House. However, without a commitment to properly resource Companies House, this requirement is effectively worthless.

The UK Government has also failed to take the opportunity to transplant Persons of Significant Control (PSC) measures that exist for Scottish Limited Partnerships (SLPs) to that of their English and Northern Irish equivalents. The PSC rules are oft cited by many as the panacea for reducing the volume of SLPs conceived for illicit purposes, so why then not harmonise rules across all LPs? Ironically, experts have attributed increasing LP registrations in England and Northern Ireland, in part, to the introduction of PSC requirements in Scotland, claiming that tighter regulation in one part of the UK only encourages dispersal. It seems ministers have chosen to ignore this point entirely, and worse, have yet to enforce the existing rules by issuing fines to non-complaint SLPs.

This package of measures clearly doesn’t go far enough to bring proper transparency to the limited partnership regime. The proposals are piecemeal, and merely tinker around the edges of reform instead of comprehensively closing loopholes and bringing proper rigour to the system. Tellingly, the report makes the bold claim respondents knew of no evidence of criminality linked to SLPs, which we know from The Herald’s reporting to be highly unlikely. It seems inconvenient evidence supporting this has been ignored.

The Government notes that a broader package of reforms to Companies House will be consulted on early next year. I will continue to urge ministers to take proper, meaningful action. Failure to do so only confirms that the Government has little interest in implementing a properly regulated regime, and in clearing up the scourge of dirty money on our doorstep.