Revealed: More than 700 British firms blacklisted in Ukraine for suspicious activity | openDemocracyBy David Leask and Richard SmithMay 16, 2020openDemocracy (U.K.)British shell companies provide high prestige with low transparency – perfect for money-laundering, popular across the former Soviet Union.
They are as common as muck in Ukraine. And often as dirty.
Foreign shell firms – ‘offshores’ in the jargon – litter the country’s politics and economy.
They are used to conceal ownership, avoid tax, make illicit payments and launder dirty money. Their abuse, say anti-corruption campaigners, help keep Ukraine poor.
Many are British, especially Scottish. Now an analysis of Ukrainian government public records by openDemocracy gives another glimpse at just how often UK corporate entities are being red-flagged in the country.
The businesses are all listed on a searchable database of thousands of international corporate entities subject to special sanctions, usually because of suspicious money transfers.
Officials decreed that such enterprises – many of which appear to be shell firms registered in traditional secrecy jurisdictions such as Panama or Belize – could trade in the country only if they obtained individual licences.
Rachel Davies, head of advocacy at anti-corruption campaign group Transparency International, suggested the sheer volume of UK entities subject to Ukrainian special sanctions reflected the widespread abuse of British shell firms in that country.
She said: “The presence of so many UK companies on this list is a stark reminder of Britain’s role as a global hub for financial crime. Despite recent advances in improving corporate transparency, it is still far too easy to set up opaque firms in Britain.Ukraine introduced its blacklist at the turn of the century as it tried to stem capital flight and address irregularities in the movement of money. Its economy ministry told openDemocracy that sanctions – which range from special licensing to fines and outright bans – were imposed by officials or courts at the request of law enforcement or market regulators.
“The limited checks on the individuals behind these companies means that UK entities regularly appear in major money-laundering scandals. Until there are tighter controls on company formation, their continued involvement in suspected financial crime poses a significant risk to the UK’s status as a safe and respectable place to do business.”
The country late in 2019 lifted its regime of special licensing but the economy ministry still publishes a searchable database of international companies which were subject to the rules. Ukrainian laws are not usually retroactive and the ministry argues that sanctions still apply to blacklisted firms, although this is under legal debate.
I skipped quite a bit to get to the last paragraphs I quoted, and the rest of the article is lengthy, as the authors take pains to outline a tangled tale -- as tangled as the era which has given rise to globalized thievery that has in effect put entire countries up for sale.
But my question at the moment is whether these blacklists have anything to do with the British government's level of intervention in the Ukraine-Russian war and Boris Johnson's fanatical support for the country's present regime. We might know if it's a factor once, if ever, the blacklisting tale gets untangled.