Like many of you, I am sure, my interest was piqued last week by the story that broke on the Beeb (or at least that’s where I first heard it) about shell companies in Scotland allegedly being used to launder the proceeds of a gigantic fraud on three Moldovan banks. There are many aspects of this investigation that will fascinate those of us with an AML turn of mind, but one that caught my eye was the assertion that one of the limited partnerships suspected of involvement “is registered along with 420 other companies in a flat in a run-down part of Edinburgh”. This reminded me of both the (defunct) Sark Lark and the assertion on Wikipedia that Ugland House in George Town, Grand Cayman “is the registered office address for 18,857 entities”.
Now, not for one second am I saying that all the companies registered at Ugland House are dodgy, nor that the 259 limited partnerships that give their address as “a flat in Pilton, the district of north Edinburgh famous as the setting for ‘Trainspotting’, the novel about heroin addicts” are up to no good. But from a due diligence perspective, it would be useful to know that the company I was looking at was living in such cramped conditions.
So I had a peek at my own local register of companies, via the WebCHeck service offered free by Companies House here in the UK. You can search on company name or number, but not on address. Now that discussions are starting in earnest about how to design a register of beneficial ownership that meets the standards of the Fourth Money Laundering Directive, it might be a good opportunity to consider whether allowing a search on address would be handy. After all, if I were an MLRO and doing a check on a new corporate client, I’d quite like to know if they share their address with hundreds or thousands of others. That alone does not mean that there is anything wrong with them, but perhaps it is another facet of identity that should be available for interpretation and risk assessment.