Westminster tells Lord Advocate to go after thousands of shell firms still refusing to disclose owners

Scotland’s Lord Advocate has been charged with prosecuting what a UK Government minister has said are 28,000 Scottish registered “tax haven” shell firms that have failed to reveal their true owners’ identities in accordance with new laws brought into force two months ago.

UK Business Minister Margot James said Scotland’s top prosecutor will go after those behind the Scottish Limited Partnerships (SLP), which are officially registered to addresses in Scotland but are frequently run by anonymous foreign entities.

Conservative MP James has this week disclosed that in the case of tens of thousands of them, their “person of significant control” are still not known, even though the penalty for such a lack of transparency has carried £500-a-day fines since August.

Responding to questions from SNP MP and anti-corruption campaigner Alison Thewliss, Ms James has now said that the Crown Office, led by Lord Advocate James Wolffe QC, will go after non-compliant partnerships.

Ms James said: “We will continue to seek compliance from those SLPs which appear to be in operation.

“The 2017 Regulations contain a number of offences and we are working with enforcement bodies to determine the appropriate action. Prosecution is a last resort and would be taken forward by the Procurator Fiscal.”

Ms Thewliss said: “The SNP has run a sustained campaign to clamp down on harmful SLPs, which have recently proved themselves to be lucrative vehicles for international criminal activity.

“The implication that SLPs failing to comply with regulation should be prosecuted by the Crown Office serves another example of why action is needed.

“In contrast to what their name may suggest, the creation and operation of SLPs is reserved. Following the SNP campaign the UK Government launched a consultation; this closed back in March and we are yet to hear what the next steps will be.”

Duncan Hames of Transparency International said: “SLPs are a known vehicle for money laundering, enabling theft on a grand scale from whole populations. The recent move to identify the real people behind SLPs is a welcome step but this law must be enforced.

“Now we have these new rules, Companies House can begin proceedings to investigate – and if necessary strike off SLPs which do not comply. This will prevent them from causing further harm and undermining the UK’s reputation as a respectable place to do business.”

A spokeswoman for the Crown Office said: “We will consider any prosecution report in relation to any alleged breach of the new Regulations to assess if there is sufficient evidence that a criminal offence has been committed and if so will consider taking prosecutorial action having regard to the public interest.”