UK ‘haven’ for money laundering

Posted on

The BBC's File on 4 programme last night had the above title. I must declare an interest. I featured in the programme, which can be listened to here.

As the BBC said in the publicity for the programme, I argued in the programme that:

Setting up a bogus company is as easy as surfing the net, says Richard Murphy of the Tax Justice Network. Mr Murphy told File On 4 that UK company law makes it simple for corrupt politicians from abroad to register sham companies in the UK.

"If you wanted form a UK company with nominees the first place you would start is Google and simply type in 'UK company with nominee directors'.

"We come up with a company straight away that is offering to form a UK company with nominee directors"

Nominee directors and shareholders will be registered at Companies House without the firm's real shareholders or directors being revealed.

"Some amendments were made in the company Reform Bill asking for a form of disclosure of who really runs a company to be required by law. And the Government put a lot of effort into ensuring that was not part of the bill.

He said the Government saw this as too much of a burden on companies but in reality it is a licence to commit fraud. However Hilary Benn International Development Secretary said the Government wasn't convinced of the need for a change adding, "in the end in regulation you have to strike a balance."

He also said an EU money laundering directive would make a real difference.

I should substantiate the claims I made. This web site was used for the programme - what I said on air was read straight from it. It supplies:

  1. A cheap company formation, for £32
  2. A nominee registered office service so no one knows where your are for £50 a year
  3. A nominee company secretary service for £49.95 a year
  4. A nominee director service for £125 a year
  5. A nominee shareholder service for £100 a year
  6. Help a company open a bank account in Lithuania for £200
  7. Provide a debit card on that bank account for £450.

Now I'm not saying that a single customer of this company, or the company itself has done a thing wrong. I have no evidence that they have. But for £1,007 you could have a company with which you have no provable legal association which has a bank account at a bank you have never visited with a debit card that can be charged against that account, which is one of the traditional ways of money laundering.

To set this up is legal in UK company law.

As I said in the programme, I think it a neglect of its duty that the UK government is not taking action to stop this in the Companies Bill now before parliament, but it is not. Put simply, that failure shows that they are not serious about tackling money laundering, tax evasion or organised crime.

It's not too late. The government could change its mind. I hope it does.