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Thousands of companies fail to register controlling interests

16 May 2018

Tens of thousands of British companies have failed to comply with the law requiring them to declare significant controlling interests, according to data released today.

Rules regarding persons with significant control (PSCs) of companies were introduced in April 2016, and extended in June 2017 to bodies such as Scottish limited partnerships, to counter fraud and money laundering. Every UK company is now legally obliged to maintain a register of PSCs and to record this information with Companies House within 14 days.

PSCs are those who own at least 25% of a company’s shares or finances, who control at least 25% of its voting rights, or have control over appointments to the board of directors.

However big data and anti-money laundering business Fortytwo Data claims that a total of 57,227 UK businesses have to date failed to make the necessary declaration under the regulations, and that this "contributes to a massively compromised AML effort".

The PSC register is designed to reduce the ability of money launderers to store and funnel cash using apparently legitimate corporate entities. At least £90bn in criminal proceeds is believed to be laundered in the UK annually, according to the National Crime Agency.

Failure to comply with the PSC requirements is a criminal offence with penalties including fines for the companies involved and up to two years in prison for the culpable individuals.

Julian Dixon, CEO of Fortytwo Data, commented: “It’s staggering how many firms are still not meeting their legal requirements head on.

“The fight against money laundering in the UK is a desperate battle being waged every day and the aim of this legislation was to prevent the culprits being able to hide in plain sight.

“Identifying fraudsters and money launderers is a complex and highly sophisticated process but severe penalties and deterrents mean nothing without enforcement. Clamping down on those companies who are not recording their PSCs is a matter of national importance.” 

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Rupert Lescher

Thursday May 17, 2018, 10:40

How do they know that £90 billion is laundered in England? Did they send out a survey asking people to indicate the amount they had laundered?

How do they know that criminals will not conceal the names and addresses of the true beneficial owners by lying when they complete the PSC declaration?

If the criminals lie is it not a waste of people’s time to make them complete PSC declarations?

If the guidelines to compliance with the 2018 AML Regulations say, as they do, that regulated businesses cannot rely solely on the PSI register when doing client due diligence then what is the point of the PSC register?