Proposal for identity verification checks to detect UK-based shell companies criticised

The UK’s Association of Company Registration Agents (ACRA) has been lobbying the British government to give its members a central role in efforts to counter the UK’s reputation as a leading provider of front companies to organised crime groups, corrupt regimes and other criminals according to a report by the International Consortium of Investigative Journalists (ICIJ).

But it also says that money laundering experts reckon the proposal put forward by ACRA is flawed because some of the association’s members are actively involved in helping establishing shell companies.

Fox and chickens

ACRA is one of several organisations that have been appointed to an expert panel advising the UK government on how best to implement reforms to Companies House, the UK’s registrar of companies.

The association claims its members process close to a quarter of incorporations in the UK each year, which represents a conflict of interests according to anti-money laundering experts quoted by ICIJ.

“It’s a bit like asking the fox to look after the chickens,” Graham Barrow is quoted as saying in the report in which he is described as an expert who has advised several global banks on combating money laundering.

No ID checks

Helena Wood of the Royal United Services Institute, the world’s oldest independent think tank on international defence and security, is also named in the report which says she has long argued that responsibility for all verification checks should be removed from company formation agencies and carried out independently.

“We know loads of these [agencies] don’t check ID. Of course they’re not doing it. They’re absolute cowboys, some of them,” she is quoted as saying.

The ICIJ report, Controversial shell-company ‘factories’ seek a role cleaning up UK’s reputationcan be found here.



Categories: Trade Based Financial crimes News

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