Thursday, 27 February 2014

Kiev investigations highlight UK lax company controls

An article, the first of a three-part series, in the Business section of yesterday's Independent, draws attention to the ease with which a company can be set up with practically no checks on the substance or probity of the people behind it. Private Eye has already drawn attention to the complementary money-manipulation possibilities afforded by limited liability partnerships as this YouTube video shows.

As a sidebar to the article states:
International authorities are considering freezing the assets of Ukrainian millionaires associated with the regime of Viktor Yanukovych. If it happens, a fresh light could soon be shone on London, where much of Kiev's wealth is said to have either ended up, or travelled through "brass plate" companies during complex laundering process. [...] some experts say the UK's overly liberal financial system has also made it a Petri dish for incubating fraud, and a magnate for money launderers.

The Fraud Advisory Panel recommends as a minimum:
* Introducing requirements for new company directors to prove their identity and demonstrate their good character;
* Ensuring all new company directors are checked against the register of disqualified directors;
* Requiring Companies House to tell directors their duties and liabilities and putting this information online;
* Preventing the exploitation of virtual and serviced offices by criminals by enforcing the existing regulatory controls on them;
* Requiring all company filings to be made online and equipping Companies House with data-mining software to identify false financial reports, disqualified directors or those with previous criminal records for dishonesty.
None of these proposals would inhibit legitimate business but would go a long way to deterring criminals from taking advantage of our system to commit fraud.

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