British authorities have identified more than a hundred local companies that are linked to Russia: a significant number of them exist only on paper and are used as "respectable pads" for doing business abroad. One of the companies, for example, was used to illegally export Ukrainian grain, while others helped Russians launder their proceeds. This is reported by Bloomberg, citing sources close to the British investigators.
Law enforcers acknowledge that the Russians have been exploiting loopholes in British law for years, creating companies that were subsequently used to launder criminal proceeds, finance illegal activities, and also evade taxes. Law enforcers note that hundreds of these companies have owners and managers from Russia, and a significant part of the legal entities made money on the war with Ukraine.
The agency notes that the Russian business lobby was one of the most influential among those who promoted the most simple and harmless regulation in the field of finance, in particular, the absence of strict checks on owners, beneficiaries and sources of income. Over the years of overly lenient regulation in the UK, thousands of front companies have been opened and used in various illegal schemes.
“We are aware of the misuse of the company registry to support illegal activities. In the event that criminal activity is identified, we will work closely with law enforcement and assist investigations,” the UK Companies House said in a statement.
At the moment, the British authorities are implementing new legislation that should tighten the requirements for companies registered in the UK. On September 22, a bill on economic crimes and corporate transparency was submitted to the British Parliament. It involves tougher checks on owners and registrars of new companies by the authorities. This should help avoid the creation of new dubious structures in the future, and will also allow thousands of current legal entities to be checked for violations of the law. The authorities say that after updating the legislation, it will become one of the toughest in the region.
The agency notes that among the companies that were subjected to checks for violations of the law, there was a company involved in the illegal export of Ukrainian grain. According to the publication, it was registered to three Russian citizens who indicated their addresses in Russia, but they do not have any significant activity in London.
Moreover, the European Union planned to impose sanctions against this company, but at the stage of discussing the inclusion of a legal entity in the last package, they were abandoned. The publication also notes that the "grain company" has the same address inside Russia as several other companies owned by Russians. Among the owners of these companies is an unnamed employee of the Russian Ministry of Internal Affairs, whose home address in Russia is listed in the UK Companies House. A law enforcement source told the agency that many Russians withdraw money to London, keep it there for several years, legalize it in this way, and then withdraw it before filing reports with the Registration Chamber, while the funds are usually kept in digital or foreign bank accounts. to reduce transparency.
The popularity of the UK as a place to register a business, the writer and financial crime expert Oliver Bullough, explains the prestige of London as a global financial center. According to him, citizens from all over the world use the UK to open "respectable pads" – companies with the help of which they can further engage in illegal or questionable activities, while using all the reputational advantages of British jurisdiction. Bullough is sure that there are hundreds of companies in the British registry that are currently being used for criminal money-making schemes, including for plundering Ukraine.