urlscan.io logo urlscan.io
SecurityTrails logo

www.opendemocracy.net Open in urlscan Pro
104.22.6.145  Public Scan

Back to summary
URL: https://www.opendemocracy.net/en/how-to-fix-dark-money-new-uk-government/
Submission: On December 18 via api from UA — Scanned from PL

Form analysis 5 forms found in the DOM

GET /search/

<form class="icon-search" action="/search/" method="GET">
  <input class="search__input" type="search" name="query" placeholder="Search...">
  <button type="submit" class="search__submit">
    <svg role="img" class="icon icon-search" viewBox="0 0 50 50" width="50px" height="50px" aria-hidden="true">
      <use xlink:href="#icon-search" class="icon-style"></use>
    </svg>
    <span class="invisible-content">Search</span>
  </button>
</form>

GET /search/

<form class="icon-search" action="/search/" method="GET">
  <!-- must have class -->
  <input type="search" name="query" class="search__input" placeholder="Search...">
  <button type="submit" class="search__submit">
    <svg role="img" class="icon icon-search" viewBox="0 0 50 50" width="50px" height="50px">
      <use xlink:href="#icon-search" class="icon-style"></use>
    </svg>
    <span class="invisible-content">Submit</span>
  </button>
</form>

#

<form action="#" class="inlaypay-form inlaypay-form-page-1">
  <h2>Support our work</h2>
  <div class="inlaypay-intro-text">
    <div class="inlaypay-intro-text">
      <p>As more and more news sites put up paywalls, we're keeping our journalism free for everyone to read.</p>
      <p>Instead of closing off what we do from people that can't afford to subscribe, we work with the support of a growing community of readers throughout the world.</p>
      <p>Together we've produced award-winning campaigning journalism that drives real change.</p>
      <p>If you value what we do, please back our work and help keep it free for everyone to read. Set up a regular donation today.&nbsp;</p>
    </div>
  </div>
  <div class="inlaypay-kind-buttons-wrapper"><button class="btn inlaypay-selectable inlaypay-kind-month inlaypay-selected" aria-pressed="true" title="Selected">Monthly</button><button class="btn inlaypay-selectable inlaypay-kind-oneoff "
      aria-pressed="false">One-Off</button></div>
  <div class="inlaypay-kind-text"></div>
  <div class="inlaypay-currency"><label for="ip-27a25f3353c2-2otherCurrency">Currency</label>
    <div class="inlaypay-select-wrapper"><select id="ip-27a25f3353c2-2otherCurrency">
        <option value="GBP">GBP - £</option>
        <option value="EUR">EUR - €</option>
        <option value="USD">USD - $</option>
        <option value="CAD">CAD - $</option>
        <option value="AUD">AUD - $</option>
        <option value="CHF">CHF - CHF</option>
      </select></div>
  </div>
  <div class="inlaypay-amount-buttons-wrapper">
    <div class="inlaypay-amount-buttons">
      <div class="inlaypay-amount-option"><button class="btn inlaypay-selectable inlaypay-amount-button inlaypay-option169 inlaypay-frequency-month " aria-pressed="false">
          <div class="amount">£10</div>
        </button> </div>
      <div class="inlaypay-amount-option"><button class="btn inlaypay-selectable inlaypay-amount-button inlaypay-option170 inlaypay-frequency-month " aria-pressed="false">
          <div class="amount">£25</div>
        </button> </div>
      <div class="inlaypay-amount-option"><button class="btn inlaypay-selectable inlaypay-amount-button inlaypay-option171 inlaypay-frequency-month " aria-pressed="false">
          <div class="amount">£50</div>
        </button> </div>
    </div>
  </div>
  <div class="inlaypay-other-amount-wrapper"><label for="ip-27a25f3353c2-2otherAmount">Other £</label> <input id="ip-27a25f3353c2-2otherAmount" type="number" step="0.01"> </div>
  <div class="inlaypay-devices-wrapper">
    <div class="inlaypay-device-directdebit-wrapper"><button class="btn inlaypay-device-directdebit">
        <div>
          <div class="inlaypay-payment-icon"><svg width="600" height="194.19" enable-background="new 0 0 612 792" version="1.1" viewBox="0 0 600 194.19" xml:space="preserve" xmlns="http://www.w3.org/2000/svg">
              <path
                d="m142.53 71.703v104.12s-60.376-10.887-60.376-52.278c3e-3 -33.013 44.696-47.563 60.376-51.844zm0-1.9426c-36.287-2.6288-118.57 14.383-118.57 51.605 0 24.27 43.569 59.751 114.52 60.683 2.7994 0 83.403-3.1135 82.157-89.627-1.0447-72.659-55.429-85.387-72.823-87.602v-4.4313c69.331 4.4006 123.86 46.095 123.86 96.704 0 53.527-60.997 97.093-136 97.093-74.998 0-135.68-43.569-135.68-97.093 0-53.524 60.683-97.093 135.68-97.093 2.2976 0 4.5781 0.041 6.8484 0.1229zm139.73-28.995h31.122s30.808-0.62475 30.497 27.383c-0.31067 20.849-29.872 23.963-29.872 23.963h-31.743v-51.346zm93.099 100.52c0.87398 4.0728 3.8168 8.5622 13.642 9.0163 13.072 0.31409 20.542-4.6669 20.542-4.6669v9.6478s-14.315 3.4208-21.16 3.4208c-7.1591 0-28.322-1.5534-28.322-21.156 0-15.868 17.428-20.849 27.387-20.849 17.425 0.62134 25.827 6.8484 25.519 24.584 0 0.25605-28.677 0.0649-37.608 3e-3zm0.0376-7.7872h23.877s0-9.0231-11.515-9.0231c-8.6646 0-11.498 4.6703-12.362 9.0231zm75.537-9.7468c3.4481-3.7417 9.2484-6.7494 18.985-6.7494 19.292 0 22.406 16.182 22.095 20.545-0.31409 4.3528-1.8674 20.849-24.273 20.849-8.4598 0-13.639-2.8882-16.804-6.4729v5.2268h-15.25v-56.016h15.25v22.617zm13.069 25.929c9.0265-0.31408 13.069-8.0877 13.069-11.823 0-3.7417-2.1781-11.515-13.693-11.515-8.9343 0-11.652 6.7494-12.447 10.047v4.0592c0.7818 3.3628 3.5198 9.2313 13.072 9.2313zm131.64-1.5534 0.31067 8.709s-7.1557 1.5602-11.823 1.5602c-4.6703 0-16.807-2.7994-16.807-14.629v-18.05h-12.758v-8.0877h12.758v-9.6478h15.561v9.6478h12.758v8.0877h-12.758v15.564s0 7.7804 6.2236 7.7804 6.5343-0.93543 6.5343-0.93543zm-47.304-98.964h18.05v43.255h15.25v-43.255h18.36v-9.0265h-51.66zm-6.2236 2.1781 1.8674-9.0265s-7.777-3.4242-21.47-3.4242c-13.383 0-34.857 7.4698-34.857 27.697 0 19.917 22.716 26.765 36.724 26.765 14.004 0 18.671-2.1781 18.671-2.1781l-1.5534-9.9585s-6.2236 1.8674-16.807 1.8674c-10.269-0.31067-20.849-8.4018-20.849-17.425 0.31067-8.0911 9.6478-17.118 21.784-17.118 9.3304 0 16.489 2.7994 16.489 2.7994zm-137.55-10.891s25.523-1.2461 25.523 13.693c0 12.758-14.629 13.693-14.629 13.693s4.049 0.62475 5.913 3.4242c1.5568 2.4888 11.826 21.16 11.826 21.16h-15.561s-2.4888-3.1101-3.7349-5.2882c-0.93201-2.1781-3.7349-6.845-3.7349-6.845s-2.1815-7.7804-9.6478-7.7804c-0.19118 0-3.233-0.11607-5.6023-0.20483v20.122h-14.939v-51.971h24.587zm-9.6444 23.338h8.0911s11.201-0.62134 11.826-7.4697c0.31067-6.5377-10.891-7.4698-10.891-7.4698h-9.0265zm62.551 8.0911h24.895v-9.6479h-24.895v-11.826h27.076v-9.9585h-42.323v51.971h42.634v-9.3338h-27.383v-11.205zm60.683 39.834h15.25v-10.583h-15.25zm0 45.436h15.25v-39.52h-15.25zm-166.18-64.732h14.939v-51.971h-14.939zm-69.71 13.075h31.122s30.808-0.62817 30.497 27.383c-0.31067 20.849-29.872 23.959-29.872 23.959h-31.743v-51.343zm15.247 41.702h9.9585s20.542-1.2461 20.542-17.118c0-15.875-21.784-17.428-21.784-17.428h-8.7158zm0-64.732h9.9585s20.542-1.5568 20.542-17.118c0-16.182-21.784-17.428-21.784-17.428h-8.7158z"
                stroke-width="3.414"></path>
            </svg></div>Donate by Direct Debit
        </div>
      </button> </div>
    <div class="inlaypay-device-paypal-wrapper"><button class="btn inlaypay-device-papal">
        <div>
          <div class="inlaypay-payment-icon"><svg version="1.1" id="Layer_1" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink" x="0px" y="0px" width="124px" height="33px" viewBox="0 0 124 33"
              enable-background="new 0 0 124 33" xml:space="preserve">
              <path fill-opacity="0.8" d="M46.211,6.749h-6.839c-0.468,0-0.866,0.34-0.939,0.802l-2.766,17.537c-0.055,0.346,0.213,0.658,0.564,0.658
	h3.265c0.468,0,0.866-0.34,0.939-0.803l0.746-4.73c0.072-0.463,0.471-0.803,0.938-0.803h2.165c4.505,0,7.105-2.18,7.784-6.5
	c0.306-1.89,0.013-3.375-0.872-4.415C50.224,7.353,48.5,6.749,46.211,6.749z M47,13.154c-0.374,2.454-2.249,2.454-4.062,2.454
	h-1.032l0.724-4.583c0.043-0.277,0.283-0.481,0.563-0.481h0.473c1.235,0,2.4,0,3.002,0.704C47.027,11.668,47.137,12.292,47,13.154z
  M66.654,13.075h-3.275c-0.279,0-0.52,0.204-0.563,0.481l-0.145,0.916l-0.229-0.332
	c-0.709-1.029-2.29-1.373-3.868-1.373c-3.619,0-6.71,2.741-7.312,6.586c-0.313,1.918,0.132,3.752,1.22,5.031
	c0.998,1.176,2.426,1.666,4.125,1.666c2.916,0,4.533-1.875,4.533-1.875l-0.146,0.91c-0.055,0.348,0.213,0.66,0.562,0.66h2.95
	c0.469,0,0.865-0.34,0.939-0.803l1.77-11.209C67.271,13.388,67.004,13.075,66.654,13.075z M62.089,19.449
	c-0.316,1.871-1.801,3.127-3.695,3.127c-0.951,0-1.711-0.305-2.199-0.883c-0.484-0.574-0.668-1.391-0.514-2.301
	c0.295-1.855,1.805-3.152,3.67-3.152c0.93,0,1.686,0.309,2.184,0.892C62.034,17.721,62.232,18.543,62.089,19.449z
  M84.096,13.075h-3.291c-0.314,0-0.609,0.156-0.787,0.417l-4.539,6.686l-1.924-6.425
	c-0.121-0.402-0.492-0.678-0.912-0.678h-3.234c-0.393,0-0.666,0.384-0.541,0.754l3.625,10.638l-3.408,4.811
	c-0.268,0.379,0.002,0.9,0.465,0.9h3.287c0.312,0,0.604-0.152,0.781-0.408L84.564,13.97C84.826,13.592,84.557,13.075,84.096,13.075z"></path>
              <path fill-opacity="0.5" d="M94.992,6.749h-6.84c-0.467,0-0.865,0.34-0.938,0.802l-2.766,17.537c-0.055,0.346,0.213,0.658,0.562,0.658
	h3.51c0.326,0,0.605-0.238,0.656-0.562l0.785-4.971c0.072-0.463,0.471-0.803,0.938-0.803h2.164c4.506,0,7.105-2.18,7.785-6.5
	c0.307-1.89,0.012-3.375-0.873-4.415C99.004,7.353,97.281,6.749,94.992,6.749z M95.781,13.154c-0.373,2.454-2.248,2.454-4.062,2.454
	h-1.031l0.725-4.583c0.043-0.277,0.281-0.481,0.562-0.481h0.473c1.234,0,2.4,0,3.002,0.704
	C95.809,11.668,95.918,12.292,95.781,13.154z M115.434,13.075h-3.273c-0.281,0-0.52,0.204-0.562,0.481l-0.145,0.916l-0.23-0.332
  c-0.709-1.029-2.289-1.373-3.867-1.373c-3.619,0-6.709,2.741-7.311,6.586c-0.312,1.918,0.131,3.752,1.219,5.031
  c1,1.176,2.426,1.666,4.125,1.666c2.916,0,4.533-1.875,4.533-1.875l-0.146,0.91c-0.055,0.348,0.213,0.66,0.564,0.66h2.949
  c0.467,0,0.865-0.34,0.938-0.803l1.771-11.209C116.053,13.388,115.785,13.075,115.434,13.075z M110.869,19.449
  c-0.314,1.871-1.801,3.127-3.695,3.127c-0.949,0-1.711-0.305-2.199-0.883c-0.484-0.574-0.666-1.391-0.514-2.301
  c0.297-1.855,1.805-3.152,3.67-3.152c0.93,0,1.686,0.309,2.184,0.892C110.816,17.721,111.014,18.543,110.869,19.449z
  M119.295,7.23l-2.807,17.858c-0.055,0.346,0.213,0.658,0.562,0.658h2.822c0.469,0,0.867-0.34,0.939-0.803
	l2.768-17.536c0.055-0.346-0.213-0.659-0.562-0.659h-3.16C119.578,6.749,119.338,6.953,119.295,7.23z"></path>
              <path fill-opacity="0.5" d="M23.048,7.667L23.048,7.667L23.048,7.667c-0.028,0.179-0.06,0.362-0.096,0.55
	c-1.237,6.351-5.469,8.545-10.874,8.545H9.326c-0.661,0-1.218,0.48-1.321,1.132l0,0l0,0L6.596,26.83l-0.399,2.533
	c-0.067,0.428,0.263,0.814,0.695,0.814h4.881c0.578,0,1.069-0.42,1.16-0.99l0.048-0.248l0.919-5.832l0.059-0.32
	c0.09-0.572,0.582-0.992,1.16-0.992h0.73c4.729,0,8.431-1.92,9.513-7.476c0.452-2.321,0.218-4.259-0.978-5.622
	C24.022,8.286,23.573,7.945,23.048,7.667z"></path>
              <path d="M21.754,7.151c-0.189-0.055-0.384-0.105-0.584-0.15c-0.201-0.044-0.407-0.083-0.619-0.117
	c-0.742-0.12-1.555-0.177-2.426-0.177h-7.352c-0.181,0-0.353,0.041-0.507,0.115C9.927,6.985,9.675,7.306,9.614,7.699L8.05,17.605
	l-0.045,0.289c0.103-0.652,0.66-1.132,1.321-1.132h2.752c5.405,0,9.637-2.195,10.874-8.545c0.037-0.188,0.068-0.371,0.096-0.55
	c-0.313-0.166-0.652-0.308-1.017-0.429C21.941,7.208,21.848,7.179,21.754,7.151z"></path>
              <path fill-opacity="0.8" d="M9.614,7.699c0.061-0.393,0.313-0.714,0.652-0.876c0.155-0.074,0.326-0.115,0.507-0.115h7.352
	c0.871,0,1.684,0.057,2.426,0.177c0.212,0.034,0.418,0.073,0.619,0.117c0.2,0.045,0.395,0.095,0.584,0.15
	c0.094,0.028,0.187,0.057,0.278,0.086c0.365,0.121,0.704,0.264,1.017,0.429c0.368-2.347-0.003-3.945-1.272-5.392
	C20.378,0.682,17.853,0,14.622,0h-9.38c-0.66,0-1.223,0.48-1.325,1.133L0.01,25.898c-0.077,0.49,0.301,0.932,0.795,0.932h5.791
	l1.454-9.225L9.614,7.699z"></path>
            </svg></div>Donate by PayPal
        </div>
      </button> </div>
  </div>
</form>

POST /api/newsetter-subscribe/

<form method="post" class="mailing-list__form" id="newsletter-signup" action="/api/newsetter-subscribe/">
  <input type="hidden" name="list_id" value="17" id="newsletter-list_id">
  <div class="single textinput sidebar__fieldset">
    <label for="newsletter-email" class="is-required invisible-content">Enter your email address</label>
    <input class="sidebar--newsletter__input" type="email" placeholder="Email address" name="newsletter-email" id="newsletter-email">
    <input class="sidebar--newsletter__input" type="text" placeholder="First name" name="newsletter-first-name" id="newsletter-first-name">
    <input class="sidebar--newsletter__input" type="text" placeholder="Last name" name="newsletter-last-name" id="newsletter-last-name">
  </div>
  <div class="buttons sidebar__fieldset">
    <button type="submit" class="btn">Submit</button>
  </div>
</form>

POST /api/newsetter-subscribe/

<form method="post" class="mailing-list__form" id="newsletter-signup-banner" action="/api/newsetter-subscribe/">
  <input type="hidden" name="csrfmiddlewaretoken" value="wGRMoL2blxkFt3OK2Homppw3zMxpHVPXm0AtUGsBuh19mnUh6q7LI1hr9RH8MYyK">
  <input type="hidden" name="list_id" value="17" id="newsletter-list_id">
  <div class="single textinput">
    <label for="newsletter-email-banner" class="is-required mailing-list__label">Enter your email address</label>
    <input type="email" placeholder="Email address" name="newsletter-email-banner" id="newsletter-email-banner">
    <input type="text" placeholder="First name (optional)" name="newsletter-first-name-banner" id="newsletter-first-name-banner">
    <input type="text" placeholder="Last name (optional)" name="newsletter-last-name-banner" id="newsletter-last-name-banner">
  </div>
  <div class="buttons">
    <button type="submit" class="btn email-signup"><span>→</span></button>
  </div>
</form>

Text Content

This website uses cookies to give you the best experience. Learn more
Got it!
Close


SIGN UP FOR OUR NEWSLETTER

Never miss a breaking news story again

Sign up
Open Democracy Home Page
Select language
 * العربية
 * English
 * Español
 * Português
 * Русский

Open menu
 * Select language
    * English
    * Español
    * Português
    * Русский

 * All
   
   
   THEMES
   
    * Conflict & security
    * Crime, justice & law
    * Cultural politics
    * Economics
    * Environment
    * Gender & sexuality
    * Health & care
    * Media & communications
    * Migration
    * Politics & activism
    * Racism & xenophobia
    * Religion & spirituality
   
   
   PROJECTS
   
    * 50.50
    * Beyond Trafficking and Slavery
    * Dark Money Investigations
    * democraciaAbierta
    * Freedom of Information
    * Who Funds You?
   
   
   REGIONS
   
    * Africa
    * Central Asia
    * China, East & SE Asia
    * Europe
    * India & South Asia
    * Israel & Palestine
    * Latin America
    * Middle East & North Africa
    * Oceania
    * Russia
    * Turkey
    * Ukraine
    * United Kingdom
    * United States & Canada
   
   
   ABOUT
   
   
   AUTHORS
   
    * Submit
   
   
   FOLLOW OPENDEMOCRACY
   
    * openDemocracy Facebook
    * openDemocracy on X
    * openDemocracy Instagram
    * openDemocracy Youtube
    * 
      openDemocracy Newsletter

 * Themes
    * Conflict & security
    * Crime, justice & law
    * Cultural politics
    * Economics
    * Environment
    * Gender & sexuality
    * Health & care
    * Media & communications
    * Migration
    * Politics & activism
    * Racism & xenophobia
    * Religion & spirituality

 * Projects
    * 50.50
    * Beyond Trafficking and Slavery
    * Dark Money Investigations
    * democraciaAbierta
    * Freedom of Information
    * Who Funds You?

 * Regions
    * Africa
    * Central Asia
    * China, East & SE Asia
    * Europe
    * India & South Asia
    * Israel & Palestine
    * Latin America
    * Middle East & North Africa
    * Oceania
    * Russia
    * Turkey
    * Ukraine
    * United Kingdom
    * United States & Canada

 * About
 * Search
   Search
 * Donate

Donate
Close Close

Please type and press enter

Submit

Home: Analysis


HOW TO FIX THE UK’S DARK MONEY PROBLEM

This should be a priority for the new UK government – and here's how it can do
it



Elspeth Berry
23 July 2024, 9.56am

British pound

|

Zedelle iStock / Getty Image Plus


SHARE VIA

 * Share on Twitter
 * Share on Facebook
 * Share on WhatsApp
 * Share via email
 * Share link

URL copied to clipboard

If you’ve never heard of limited liability partnerships (LLPs), or you don’t
know why they are important – read on. 

Simply put, LLPs are corporate bodies whose members have the benefit of limited
liability. This means, for instance, that if two people set up an LLP, and
things go badly, there is a limit to how much those people are on the hook for. 

Bad actors from around the world have used LLPs registered in the UK to
facilitate a wide range of harms to people in the UK, to the UK economy, and to
innocent people in countries such as Ukraine. Our security is threatened by the
use of LLPs by Russian military and intelligence agencies and by the North
Korean government. And our economy and individual safety and wellbeing is
threatened by the use of LLPs for money laundering which is associated with
political corruption, with drug, arms and people trafficking, and with tax
evasion. 

But there is a solution. And it should be a priority for the new UK government. 


GET OUR FREE DAILY EMAIL

Get one whole story, direct to your inbox every weekday.

Sign up now

The solution should have been the Economic Crime and Corporate Transparency Act
2023 (ECCTA), which was designed to do what it says on the tin – combat economic
crime and improve corporate transparency. 

ECCTA was a hard-won victory in the face of considerable opposition from vested
interests in the financial services and corporate service provision industries.
But, sadly, ECCTA is riddled with loopholes, as evidenced by the fact that the
All Party Parliamentary Group (APPG) on Anti-Corruption & Responsible Tax has
had to issue a second Economic Crime Manifesto to highlight the failings and set
out a strategy for progress in addressing them.

One of ECCTA’s many flaws was that it did not apply at all to LLPs, even though
their role in criminality is long established – for example the Danske Bank
money laundering case, and the Azerbaijani and Russian laundromats. And although
regulations to extend ECCTA to LLPs have now been enacted, they have not
benefited from the extensive Parliamentary scrutiny afforded to the primary
legislation, and have many loopholes which will allow the criminality to
continue.

LLPs were introduced in 2000 to combine the benefits of the traditional
partnership with those of a limited company but, as a result, LLPs fall between
two stools when legislation is proposed for either companies or partnerships.
Even the otherwise admirable second Economic Crime Manifesto fails to mention
LLPs. 

So the solution is to put LLPs front and centre of efforts to close loopholes in
ECCTA and in the landscape of combating economic crime.


A PARTNERSHIP OF FACELESS CORPORATIONS

One of the key loopholes is that there are no restrictions on the use of
corporate LLP members. This means that an LLP can be a partnership between two
faceless corporations, rather than between individuals who are easier to trace.
This is problematic because the use of corporate members facilitates secrecy and
lack of accountability, and is thus, as Transparency International has reported,
a risk factor for money laundering, bribery and corruption, tax fraud, bank
theft, and facilitation of drug trafficking. 

Indeed, the UK government has already acknowledged equivalent risks in relation
to companies, which have for several years been required to have at least one
director who is an individual. 

Moreover, a general prohibition on all corporate directors (albeit subject to
significant exceptions) is pending, and such prohibitions already exist in many
other jurisdictions, including the US. The rationale for this prohibition, as
explained by former MP Dame Margaret Hodge in Parliament, can readily be
transposed to LLPs. First, sanctions for wrongdoing lack bite against corporate
members, because  any fines are paid by their shareholders, while the threat of
imprisonment is meaningless for a corporate body.  Second, corporate members are
used to obscure the identities of the individuals behind them, and are thus
ideal for individuals wishing to use LLPs to commit fraud or other crimes. 

Since LLPs mirror companies in being able to limit the financial liability of
their members, they should also mirror the safeguards applicable to companies,
so that any restrictions on corporate directors should apply equally to
corporate LLP members. Yet the government has refused to apply any of these
restrictions to LLPs, citing concern about ‘affecting the legitimate use of
these structures, particularly in the investment sector’.


NO RESTRICTIONS ON OVERSEAS MONEY

A second loophole is that there are no restrictions on the use of overseas LLP
members. This is problematic because their use, like that of corporate members,
facilitates secrecy and enables economic crime. The FinCEN files demonstrated
the use of UK LLPs by Russian mafia groups, Mexican cartels, a corrupt Italian
politician and international fraudsters. 

Of course, the frequent use of LLP members which are both corporate and overseas
creates a perfect storm of anonymity. A corporate entity obscures the identity
of the individuals operating it, and many overseas jurisdictions increase this
obscurity by having minimal transparency requirements for the corporate entity,
or minimal enforcement of those requirements.

As Transparency International note, many of the LLPs used in corruption and
money laundering schemes are incorporated in high-risk secrecy jurisdictions
where corporations are not required to disclose their ‘beneficial owners’ – in
other words the human beings who ultimately own and control the business. 

Again, the parallel problem of overseas directors, and indeed of overseas
‘corporate service providers’ (CSPs) who register and file accounts and other
paperwork on behalf of UK firms, was recognised by the government in its
proposals to restrict corporate directorships to UK-registered corporate bodies
and ban overseas CSPs. However, neither proposal made it through to ECCTA, and
there is no equivalent in the LLP Regulations.


LIMITED DISCLOSURE

A third loophole exists because the LLP Regulations have not addressed the
deficiencies in the ‘people with significant control’ (PSC) rules which
supposedly mandate disclosure of who ultimately owns and controls UK firms.
These rules require public disclosure of the identity of any person who has more
than 25% of the voting rights or capital in an LLP, or the right to appoint or
dismiss its managers. 

However, the 25% threshold is too high, and in any event can easily be
circumvented through those with lesser shares working together. Another problem
is that LLPs can declare they have no PSC, and the odds are that Companies House
will either believe this, or have insufficient resources to investigate the
truth of the claim. 

A fourth loophole concerns corporate service providers, or CSPs. CSPs are not
properly regulated for anti-money laundering purposes, and LLPs formed by CSPs
have been heavily implicated in the widespread use of LLPs for criminal
purposes. Yet CSPs continue to be allowed to form, and make public filings on
behalf of, LLPs. 

Worse still, when the ECCTA-derived provisions requiring identity verification
of LLP members and PSCs are brought into force, that verification will not have
to be carried out by Companies House but will be permitted to be outsourced to
CSPs without any additional oversight. CSPs need to be properly regulated.

Yet another loophole is the lack of any limit on the number of LLP member (or
PSC) appointments which a person (corporate or individual) may hold, despite
multiple appointments being associated with LLPs involved in crime. The
government consulted on whether to impose a limit on the number of directorships
which a person could hold, but ultimately decided not to, and did not even
consult on LLPs. A limit would be easy to impose, and indeed has been done in
Ireland. 

Finally, there is no evidence that any of the above behaviours will constitute a
‘red flag’ to Companies House to investigate further or share information with
regulators or enforcement agencies. And, the paltry increase in Companies House
fees for LLP registration from £10 to £50 leaves it still woefully short of the
EU average of €300. Triggers for Companies House investigations based on what we
already know about LLP structures associated with wrongdoing need to be
enshrined in Companies House policy, and proper resourcing for investigations
needs to be provided.

You can sign up for updates on the work of the APPGs, or listen to or read more
about the work of those investigating this under-the-radar business vehicle at
organisations such as The Dark Money Files, Finance Uncovered, Transparency
International and the Tax Justice Network. And of course, you can vote for
individuals or parties who are committed to tackling these abuses despite all
the lobbying by the financial services sector. 


SUPPORT OUR WORK

As more and more news sites put up paywalls, we're keeping our journalism free
for everyone to read.

Instead of closing off what we do from people that can't afford to subscribe, we
work with the support of a growing community of readers throughout the world.

Together we've produced award-winning campaigning journalism that drives real
change.

If you value what we do, please back our work and help keep it free for everyone
to read. Set up a regular donation today. 

MonthlyOne-Off

Currency
GBP - £EUR - €USD - $CAD - $AUD - $CHF - CHF
£10
£25
£50
Other £

Donate by Direct Debit

Donate by PayPal

Problems donating?


READ MORE

Get our weekly email

Enter your email address
Submit


READ MORE

 * Published in: Home
   Our under-resourced legal aid system is dangerous. It needn’t be this way
   Written by: Frances Timberlake All articles by: Frances Timberlake
 * Published in: Home
   BR-319: A highway to climate chaos in the heart of the Amazon
   Written by: Mônica Piccinini All articles by: Mônica Piccinini
 * Published in: Home
   What does Assad’s defeat in Syria mean for the region’s geopolitics?
   Written by: Paul Rogers All articles by: Paul Rogers
 * Published in: Home
   ‘Time is water’: A cross-border Indigenous alliance works to save the Amazon
   Written by: Francesc Badia i Dalmases All articles by: Francesc Badia i
   Dalmases

View all in Home
Had enough of ‘alternative facts’? openDemocracy is different Join the
conversation: get our weekly email
Enter your email address
→


COMMENTS

We encourage anyone to comment, please consult the oD commenting guidelines if
you have any questions.



RELATED

 * Dark money
 * United Kingdom

This article is published under a Creative Commons Attribution-NonCommercial 4.0
International licence. If you have any queries about republishing please contact
us. Please check individual images for licensing details.

All our projects
 * openDemocracy Facebook
 * openDemocracy on X
 * openDemocracy Instagram
 * openDemocracy Youtube

© openDemocracy 2024
 * About
 * People
 * Contact
 * Write for us
 * Jobs
 * Privacy notice


Audio available Bookmark Check Language Close Comments Download Facebook Link
Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram
WhatsApp yourData