SHADOWY business structures which have re-entered the spotlight in the row over “dirty Russian money” in the UK are tarnishing Scotland’s global brand, it has been claimed.

Scottish Limited Partnerships (SLPs) are controversial business arrangements which effectively allow the owners of businesses, often involved in crime, to register their companies while keeping themselves anonymous.

They are used to launder money and lend illegal businesses – including arms dealers and criminal gangs – a veneer of credibility, bolstered by the Scottish link, which is seen globally as a “good place to do business”.

Michelle Thomson, SNP MSP for Falkirk East, is leading the charge in Scotland to renew scrutiny of SLPs in light of reignited fears of the influence of shady Kremlin-linked firms using the UK to launder money.

READ MORE: Scottish Tory MSP urged to delete bizarre reply to 'Londongrad' criticism

While there is action the Scottish Government can take, including using its “soft power” over Westminster to push for comprehensive reform of SLPs, the real responsibility lies with the London government, according to Thomson.

Thomson has been a long-time advocate for reform of SLPs – which she says have been “resisted for years” by successive Tory governments.

Money laundering costs the UK economy more than £100 billion per year, according to a report from the National Crime Agency in 2019.

But the impact will be felt by Scottish businesses due to reputational harm caused by the link between criminal organisations and SLPs, according to Thomson.

She told the Sunday National research she undertook as part of her work as head of the business consultancy firm Momentous Change showed the importance of the “trust factor of Scotland as a place to do business” and that Scots were considered “ethical and trustworthy” people with whom to deal.

“I really object to our global brand being besmirched in this way by the laziness and collusion of the Tories in Westminster,” Thomson added.

“They have failed to do something about them over a period of years.”

Criminals exploit SLPs because, unlike a limited partnership in England, the individuals involved can “obscure and obfuscate” the true identities of individuals behind firms, said Thomson.

MSPs unanimously voted on Wednesday to back the UK Government’s Economic Crime Bill, which is currently working its way through parliament.

But Thomson believes the legislation does not go nearly far enough – pointing out in parliament this week that the bill as it stands “makes disclosure completely optional”.

She added: “I would have thought that secret property ownership by oligarchs and others would be considered to be a bad thing in all circumstances.

“However, the bill will allow the UK Secretary of State to exempt individuals from having to register if [an] exemption is thought to be for our own wellbeing. Perhaps that is a perk for pals of the secretary of state.”

Meanwhile, she has called on the Scottish Government to use its “soft power” to urge Westminster to go further.

She said: “[The Scottish Government] are signalling that they absolutely want these matters to be dealt with efficiently and effectively.

“However, this regulation is wholly reserved. I anticipate that there will be continued calls for them to do more as individual events come up.”

The Law Society of Scotland has a role to play here, according to

Thomson, because its members are sometimes involved in setting up SLPs for clients.

She added: “If they are obeying the rules, in full knowledge the rules are weak and could be dodgy, they may ethically need to be looking at themselves.”

The Law Society of Scotland said research by the investigative journalism outlet Bellingcat had shown that no Scottish legal firms had been involved in setting up SLPs for clients involved in money laundering.

The organisation’s chief executive Diane McGiffen said the Law Society of Scotland was “acutely aware” of the money laundering risks posed SLPs.

SHE added: “Our members are held to exceptionally high standards across the breadth of their work, including anti-money laundering responsibilities, and our specialist anti-money laundering team proactively monitors the level and type of SLP work undertaken by members, communicates the inherent risks associated with these structures, and undertakes robust and risk-based assurance across this type of activity.”

READ MORE: Patrick Harvie hits back at Scottish Tory attack line on North Sea oil and gas

A UK Government spokesperson called the abuse of SLPs “appalling” adding: “Company formation agents are required by law to register for anti-money laundering supervision, as well as conduct Customer Due Diligence checks.

“Our forthcoming Economic Crime Bill will reform the law on limited partnerships as well as strengthening the powers of Companies House to give it a bigger role in tackling economic crime.”

A spokesperson for the Scottish Government said: “For some time we have called on the UK Government to tighten the regulatory framework around Scottish Limited Partnerships. Therefore we welcome that new regulations are now being introduced on beneficial ownership.

“The Scottish Government is in regular contact with the Law Society of Scotland and discussions cover a range of issues including Scottish Limited Partnerships.”