Originally Syndicated on July 22, 2023 @ 6:18 am
The Scottish corporate law firm Burness Paull has made serious accusations against Russian oligarch Alexey Krapivin, alleging that he has been using the firm’s address without authorization. Krapivin is currently facing allegations of using a network of shell companies to transfer billions of dollars out of Russia’s state-owned railway operator. The Russian oligarch is purportedly in control of an Edinburgh-registered shell company that operates out of the same offices as Burness Paull.
Table of Contents
Continued Use of Address Despite Bribery Scandal
Burness Paull claims that Alexey Krapivin continued to utilize its address even after the law firm shut down its company mailbox service in 2018 due to a multi-million-dollar bribery scandal. This raises concerns about the potential misuse of the law firm’s prestigious address for illegitimate purposes.
Krapivin’s Involvement with Scottish Limited Partnership
Despite the controversies surrounding Krapivin, he still holds a controlling stake in a Scottish Limited Partnership (SLP) named Clover Consulting Partners, which is registered at Burness Paull’s 50 Lothian Road offices. SLPs are unique entities in the UK, possessing “legal personality,” allowing them to own property, enter into contracts, and initiate legal actions. However, SLPs also offer a level of anonymity to their owners, making them susceptible to misuse by individuals engaging in illicit activities.
SLPs and the Issue of Anonymity
Critics of SLPs argue that their minimal disclosure requirements provide a shield for criminals to conduct various unlawful activities while maintaining their anonymity. This anonymity may have enabled Krapivin to continue using Burness Paull’s address without detection.
Clover Consulting Partners Registration at Burness Paull
According to Companies House, Clover Consulting Partners was initially registered at Burness Paull’s Edinburgh Offices in February 2005. The partnership was formed by Isle of Man-based Orsettridge Resources Limited and British Virgin Islands-registered Tobiana Limited. Burness Paull stated that Clover Consulting Partners registered itself at their offices after the law firm started offering an office mailbox service through a third-party UK registration agent.
Burness Paull’s Response and Denial
Burness Paull firmly denied any association with Alexey Krapivin or providing advice to Clover Consulting Partners. They emphasized that the shell company was not authorized to use their Edinburgh address and explained that the provision of accommodation services to third-party registration agents was discontinued for commercial reasons in 2018. Despite this, SLPs that previously registered at Burness Paull’s offices are still using the address, raising further concerns about the misuse of the firm’s location.
Alexey Krapivin’s Disclosure of Stake
In June 2017, Krapivin disclosed his stake in Clover Consulting Partners after Companies House introduced new rules mandating SLPs to reveal any individuals with significant control over the Scottish shell companies. The declaration brought Krapivin’s involvement to light, but it raises questions about his intentions and the potential ramifications of his association with the Edinburgh-based SLP.
Law Firms are facing pressure to Counter Money laundering
The revelation of Alexey Krapivin‘s alleged use of Burness Paull’s address has put law firms under scrutiny regarding their safeguards against money laundering activities. Alison Thewliss MP, the SNP’s Treasury spokeswoman, expressed deep concern over law firms being unwittingly involved in laundering “dirty money.” She stressed the need for firms to thoroughly check and verify the companies that use their addresses, as Companies House does not currently challenge firms on the accuracy of their filings concerning their physical locations.
Lack of Regulation and Potential Risks
Thewliss highlighted a “gaping hole in the jigsaw of company regulation,” suggesting that stricter oversight is required to prevent such unauthorized use of prestigious law firm addresses. The potential risks associated with legal firms hosting companies without proper due diligence were also emphasized, as these firms might unwittingly facilitate illicit activities, including money laundering.
Anti-Money Laundering Measures in the Legal Sector
The Law Society of Scotland acknowledged the increased anti-money laundering risk landscape, especially about SLPs, and expressed its commitment to addressing these challenges. Burness Paull’s chairman, Peter Lawson, offered to meet with Thewliss to discuss her concerns further.
Conclusion
The accusations against Russian oligarch Alexey Krapivin for using Burness Paull’s address without authorization highlight the need for enhanced scrutiny and anti-money laundering measures within the legal sector. The case serves as a reminder of the potential risks associated with shell companies and the importance of ensuring transparency and compliance with regulations to prevent illicit financial activities.
