21 May 2018

Control of UK companies remains shrouded in mystery

According to new research over 57,000 UK companies are not declaring ownership, compromising fight against money laundering

Over 57,000 British businesses have not correctly declared People with Significant Control (PSCs). Last year’s PSC regulations were strengthened last year in a bid to clamp down on fraud and money laundering, with failure to follow requirements is a criminal offence that can carry up to two years' imprisonment.

Big Data and Anti-Money Laundering (AML) experts Fortytwo Data have released research that shows 57,2271 UK businesses are not yet compliant with the new regulations. The rules were tightened in June last year following their introduction in April 2016, with every UK company 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.

Compromised effort
According to the National Crime Agency, at least £90 billion in criminal proceeds is believed to be laundered in the UK annually. The PSC register is designed to reduce the ability of money launderers to store and funnel cash using apparently legitimate corporate entities. The vast majority of companies are complying, but the 57,227 raises concerns that they contributes to a massively compromised AML effort. Julian Dixon, CEO of Fortytwo Data, commented, ‘It’s staggering how many firms are still not meeting their legal requirements head on.’ It is a criminal offence not to follow the PSC requirements, with potential sanctions including fines for the companies involved and up to two years in prison for the culpable individuals.