The British corporate registry system is on the front lines of managing the complexities of decentralized corporate registrations and the due diligence associated with preventing shell companies from facilitating illicit money flows. The heightened regulatory and financial risks in the lack of ownership transparency, the ability to evade tax obligations and the ease to conceal illegal financial activity are a looming risk to financial systems in the UK and globally. This risk has been increased in recent years as online, remote corporate registrations have become more accessible.
As Celeste Byam highlighted in her article in July 2017, "The landscape of banking has changed drastically in the last 15 years, and with innovative banking technology and access to the international markets, shell and shelf companies have become ideal conduits to facilitate financial activities worldwide. Providing financial services to shell companies involves varying degrees of risk due to their appeal as a money laundering typology (mostly because of the real or perceived appearance of legitimacy) per the Financial Action Task Force."
“For the price of some fish and chips, anyone in the world could log in, form a company, put in any name they liked, Mickey Mouse and Donald Duck, somebody else’s name, totally fictitious names, get their companies formed and get their certificate,” he said. “You could be in Russia, Jamaica, anywhere.”