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New measures to tackle international money laundering

Dec 13, 2018

Measures to increase transparency and prevent abuse of limited partnerships, which some criminals have used to launder dirty money through the UK were unveiled on 10 December, as the UK Government published its response to the consultation on the reform of Limited Partnership law.

Scottish Limited Partnerships (SLPs) and Limited Partnerships (LPs) are used by thousands of legitimate British businesses, particularly the private equity and pensions industry, which invest more than £30 billion a year in the UK. However, there are concerns that they are being abused by criminals following large-scale money laundering scandals.

New filing requirements for all Limited Partnerships will make them more transparent with their information, preventing their abuse while enabling investors to continue to use them legitimately and invest in the UK. The key proposals are:

  • Those registering Limited Partnerships must demonstrate they are registered with an official anti-money laundering supervised agent, such as an accountant or a lawyer, or an overseas equivalent;
  • The Limited Partnership must demonstrate an ongoing link to the UK, for example by keeping its principal place of business in the UK;
  • All Limited Partnerships must submit a confirmation statement at least every 12 months to Companies House to ensure their information is accurate and up to date; and
  • Companies House will be given powers to strike off dissolved Limited Partnerships and Limited Partnerships which are not carrying on business.

The proposed reforms will apply to all Limited Partnerships in the UK. In addition to requirements that are in place for Scotland, the reforms will also include new reporting requirements for Limited Partnerships in England, Wales and Northern Ireland. This will confirm that the information they have placed on the register is up to date and correct.

Last year, the UK Government introduced laws requiring SLPs to report their beneficial owner and make their ownership structure more transparent, seeing an 80% reduction in the number registered and these reforms seek to raise standards further.

This announcement comes ahead of a broader package of reforms to Companies House to ensure it is fit for the future and continues to contribute to the UK's business environment – the best place to start and grow a business. The Department for Business, Energy and Industrial Strategy plans to consult on these reforms in the New Year.

Source: Office of the Secretary of State for Scotland.