THERE’S been a cautious welcome for UK Government plans to tackle a loophole which it says allows Scottish Limited Partnerships (SLPs) to be exploited by gangsters and tax evaders.

But campaigners say they need to see the full details of the proposals, and one MP expressed concern they wouldn’t go far enough to tackle “money laundering on our doorstep”.

SLPs have been linked to large-scale money laundering, tax evasion and other criminal activity.

They have also been implicated in the Russian laundromat scheme, which saw around $80 billion moved out of Russia between 2010 and 2014.

SLPs are formed by at least two parties, one of which must be a general partner, who is liable for any debts incurred, and one limited partner, who has limited liability and cannot play a role in how the partnership is run.

Their attraction to the underworld is in part because of the secrecy they allow and in part because they have “legal personality”, which allows them to enter into contracts, take on debts or own property.

Other limited partnerships in the UK don’t allow that.

In the four years before 2016, the number of SLPs registered in Scotland increased by 237 per cent, while those registered elsewhere in the UK increased by 43 per cent; 16,461 new SLPs were registered at just 10 addresses in Scotland.

The Government released new statistics showing just five people were responsible for over half of 6800 SLPs registered between January 2016 and mid May 2017.

Much of the abuse of the system has only been uncovered thanks to the investigative journalism of our sister paper, The Herald. Under the new proposals, applicants for SLPs will need to show a real connection to the UK and do business or maintain an address in Scotland.

Business Minister Andrew Griffiths said: “The UK has taken a leading role in the fight against money laundering and is known internationally as a great place to work, invest and do business.

“But as we are seeing, especially with Scottish Limited Partnerships, they are being abused to carry out all manner of crimes abroad – from foreign money laundering to arms dealing.

“This simply cannot continue to go unchecked and these reforms will improve their transparency and subject them to more stringent checks to ensure they can continue to be used as a legitimate way for investors and pension funds to invest in the UK.”

SNP MP Alison Thewliss, who has campaigned against the loophole, added: “The SNP awaits the full detail of the actions the UK Government are prepared to take, but I remain concerned that this will not go far enough to tackle money laundering on our doorstep.

“To weed out those abusing SLPs from legitimate businesses, SLPs must be tied to a real UK person, with a UK bank account.

“They must file accounts like other businesses, and they must be transparent and accountable.”

“After the Salisbury incident, Theresa May committed to tackle corruption and the flow of criminal assets through the UK. If she is serious about this, all loopholes must be closed, and done so swiftly,” added Thewliss.