Scottish limited partnerships (SLPs) are business schemes that have been used to move $80bn from Russia to the United Kingdom in just four years, according to a review by the Department for Business, Energy and Industrial Strategy (BEIS).
It also said just five individuals were behind thousands of SLPs registered between January 2016 and mid-May 2017.
As reported by the BBC, the department is due to launch a consultation on April 30 on proposals to close loopholes in the law regarding the scheme. The proposals would apply to all limited partnerships in the UK.
Concerns about criminal activity surrounding SLPs have been highlighted by the Herald newspaper which has been campaigning on the issue.
Under the new proposals, SLP users will need to have “a real connection to the UK” and do business or maintain an address in Scotland to operate an SLP. According to the BBC, they will also need to register through an agent who will carry out anti-laundering checks.
“The UK has taken a leading role in the fight against money laundering and is known internationally as a great place to work, invest and do business,” said UK Business Minister Andrew Griffiths. “But as we are seeing, especially with Scottish limited partnerships, is that they are being abused to carry out all manner of crimes abroad – from foreign money laundering to arms dealing.”
“I welcome these proposals to crack down on money laundering,” said Scottish Secretary David Mundell. “These latest reforms will help ensure Scotland and other parts of the UK continue to be known internationally as great places to work, invest and do business.”