CCR Magazine

You are here  :Home arrow News arrow Could you become part of a “Panama Papers” problem?
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines

Headlines

 
Commercial Credit News

Headlines

 
Could you become part of a “Panama Papers” problem? PDF Print E-mail
Friday, 08 April 2016
Recent press stories surrounding the documents held by Panama-based law firm Mossack Fonseca, collectively called “The Panama Papers”, have given ‘nominee directors’ a starring role for their ability to hide the identities of beneficial owners. And, through that, hide the realities behind billions of pounds’worth of business transactions. 

Alan Norton, Head of Intelligence at Graydon UK, explores the murky world of nominee directors

Nominee directors – always based beyond the jurisdiction of the offenders’ own countries – sign official company documents, thus giving the real players substantial legal skirts to hide behind. Fraudsters of all kinds, including tax evaders, pay well for the resulting anonymity. And they can afford to, because the proceeds of their dodgy deals are well in excess of their legitimate income.

In its 2013 report, ‘Secret Structures, Hidden Crimes’, the European Network on Debt and Development (Eurodad) explained how opaque legal structures are one of the best ways to hide the real ownership of entities thereby facilitating money laundering, tax evasion, and related crimes.

And, thanks to the Panama Papers, we now know for sure that the client lists of these nominee directors, any one of whom can represent hundreds or even thousands of companies, include those owned by world leaders, billionaires, celebrities and sports stars as well as prominent members of the criminal fraternity.

Nominees, despite being directors in name, are beyond the reach of company law. And this includes the UK. They have absolutely no responsibility for the activities of the companies they represent. And, before allowing the use of their names, addresses and signatures, they will also seek protection from all financial liabilities.

The British Government has tried to crack down on this activity, but its hands are tied. Until the late 1990s, the British Channel island of Sark was a hotbed of nominee directors. The local term for this industry was “The Signing.” Sark, an island of 600 souls managed to collect 15,000 directorships in companies around the globe. The Government pounced in 1999 and most of the nominees fled to places like Cyprus or Nevis in the Caribbean, where they carried on their lucrative trade.

A Graydon database example shows a Mr AM Cunningham, (Date of Birth: 18th February 1939) using a service address in Nicosia, as being a company officer of 187 companies having previously resigned from a further 200! You can easily Google partial records for such people – and, while you’re at it, take a look at the connections they have. These are almost as instructive as the raw personal data. In Mr Cunningham’s case, he is well connected with people in Sark. According to Companies House, he even had a business address there until 2001.

It’s easy enough to dig into the background of a single individual or a single company, but it gets exponentially more complex if your business requires you to monitor and check on people and companies continuously. This is where a good credit reference agency can help. They hold vast amounts of data on company directors and can help assist in establishing the true identity of your trading partners.

With the legal implications and the potential damage to your company reputation, it’s now more important than ever to understand who you are trading with.
 

 Forums International Ltd

Forums International Ltd

 Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.

Find out more here.

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online

subscriptions

CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


 

Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road
Southend-on-Sea
Essex
SS1 1EP

Registered in England No: 05483197