Money launderig risks uncovered by analysis of UK company ownership

By agency reporter
July 26, 2018

Global Witness in collaboration with DataKind UK has exposed how criminals and the corrupt could be exploiting loopholes in the UK company register.

“Up to now, the UK Government has played a leading role in the fight against corruption. This pioneering register could make it much harder for criminals to launder dirty cash through UK companies, but it won’t fulfil its potential until the Government gives Companies House the resources and mandate for the job”, said Nienke Palstra, Anti-Corruption Campaigner at Global Witness.

“As 43 countries follow suit, it’s time the UK showed the world just how powerful this data can be, by closing these loopholes and investigating the people who aren’t playing ball.”

    Taking advantage of the open data nature of the register Global Witness has developed an online tool for flagging risky companies, which reveals:

    • 345 companies have an owner who is a disqualified director
    • 390 companies have company officers or owners who are politicians
    • 7,848 companies share an owner, officer or registered postcode with a company suspected of having been involved in money laundering 

    The analysis, the most comprehensive to date, exposes that while almost 3.6 million companies have declared at least one beneficial owner in the register, there are loopholes that are easy to exploit:

    • more than 335,000 companies declare they have no beneficial owner (which is legal, if no individual owns more than 25 per cent of the company) 
    • more than 10,000 companies declare a foreign company as their owner, with 72 per cent of those linked to a secrecy jurisdiction (which means that anti-corruption organisations like Global Witness and members of the public cannot find out the real owner behind the company) 

      The UK’s Anti-Corruption Champion, John Penrose MP said, "Britain may be a world leader when it comes to open and transparent company registers, so criminals, kleptocrats and oligarchs can’t hide their ill-gotten gains in dark corners anymore. But this report shows we can’t relax either. There’s still a long way to go, for Britain and every other country that’s serious about fighting corruption too."

      The Government must stop accepting the information in the register at face value, sanction the companies who don’t comply with the rules and investigate those that pose money laundering risks.

      Since the Government removed the paywall, the UK’s company register was accessed over 2 billion times in one year, demonstrating the significant and growing demand for this type of company information. None of the findings in ‘The Companies We Keep’ would have been possible without the open data format of the register.

      All 28 EU countries, as well as the UK Overseas Territories will be required to set up similar public registers by 2020. The UK's Overseas Territories, in particular, include some of the world's most secretive tax havens.

      * Read the report The Companies We Keep: What the UK's open data register actually tells us about company ownership here

      * DataKind UK is focused on bringing data science in all its forms to those who share a vision of a sustainable planet in which all have access to basic human needs.  https://www.datakind.org/

      * Global Witness https://www.globalwitness.org/en-gb/

      [Ekk/6]

      Analysis of the owners of UK companies 'uncovers serious money laundering risks'

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