UK companies set up to launder proceeds of corruption
New BBC investigation shines light on role of UK companies in laundering corrupt money 

6^th February 2018, London – A new investigation by the BBC has identified £1.2 billion in suspicious wealth being channelled through companies registered at the same address in Hertfordshire. The investigation reveals that some of this wealth represented profits siphoned off from an official Eurovision Song Contest after party, and ended up in the pockets of the inner circle of former Ukrainian President – Viktor Yanukovych.

This investigation draws on research from Transparency International UK that identified 766 UK firms involved in 52 cases of global money laundering and corruption amounting to £80 billion. More than one in ten of these companies were registered to the same rundown office on Potters Bar High Street cited in the BBC investigation.

The UK has made progress in ending the abuse of British firms by requiring the true owners of companies to identify themselves on a register. But the BBC’s investigation includes new analysis from Global Witness that found nearly one in ten British companies, registered with Companies House, fail to name their owner – also known as person of significant control. Just 20 people at Companies House are charged with verifying the data of almost 4 million UK firms, a contributing factor of why many companies are ignoring the new transparency rules.

Often the abuse of the British company formation system is facilitated – either unwittingly or knowingly – by professionals who form and administer companies on behalf of corrupt individuals. Trust and Company Service Providers (TCSPs) – as these professionals are known – are poorly regulated, with low anti-money laundering standards. Meanwhile TCSPs with no physical presence here are able to form British companies without being subject to any UK anti-money laundering regulation.

Rachel Davies Teka, Head of Advocacy at Transparency International UK, said:

“UK companies are being created purely as get-away vehicles for corrupt individuals stealing money from some of the poorest populations in the world. We have to ask who is setting up these companies and why the system allows many of them to do so with little to no oversight.”

“Let’s be clear, some of the biggest cases of corruption around the world are made possible with the complicity of British based companies and the professionals that help form them. This is a national disgrace and whilst efforts have been made to end this problem, a lack of proper oversight and resourcing means we are still some way from ending our complicity in global corruption.”

“A good first step would be to ensure that only regulated Trust and Company Service Providers are allowed to set up UK companies. We have already highlighted 52 cases of money laundering and corruption that were possible with UK firms, if the UK does not address its porous money laundering defences, it is only a matter of time until another investigation adds to this shameful tally.”

A separate investigation by the Scottish Herald last week found five UK companies had been involved in laundering money as part of the Brazilian Odebrecht scandal in which bribes were paid to dozens of politicians across Latin America.

BBC File on 4: “The Great British Money Laundering Service” will air at 2000 GMT on BBC Radio 4 on Tuesday 6^th February, and will include an interview with Duncan Hames, Director of Policy at Transparency International UK.

***ENDS***

Contact:

Dominic Kavakeb
020 3096 7695
079 6456 0340
dominic.kavakeb@transparency.org.uk