In this blog post, senior policy and compliance adviser Robert Windsor outlines BIFA’s ongoing engagement with government agencies, the police and other stakeholders to raise awareness of fraud within the supply chain.

He highlights recent developments involving Companies House and enforcement action against non-compliant company service providers, reinforcing the need for Members to strengthen due diligence and approach all information with caution.

BIFA has been engaging with government agencies, the police and other interested parties to raise the profile of fraud within the supply chain. The more that we delve into the matter the more we become concerned, our mantra has always been “Know your customer” and this is as important now more than ever. Now Members must add a new mantra to their way of thinking – “Do NOT trust any single piece of information provided – Check, Check and Check again.”

One organisation BIFA has worked with is Companies House, who are implementing the Economic Crime and Corporate Transparency Act (ECCTA).  There are various aspects to this work, verifying a Director’s identity is expected to lead to at least some removing themselves, which in turn will lead to some companies disappearing from the register of Companies.

Recently there has been further scrutiny on companies, and we have heard of a particular focus where one postcode accommodates multiple companies. 

BIFA was particularly pleased to read recent news that reported: –

• Three connected companies have been shut down after providing company secretary and registration services to more than 11,000 UK businesses for overseas clients, predominantly from China
• The companies operated an unregulated business model, failing to register as trust and company service providers, not conducting anti-money laundering checks, and creating a false impression that their clients had a genuine UK business presence
• The Insolvency Service brought the case to protect the integrity of the Companies House register and prevent potential misuse of company structures by businesses with little to no actual presence in the UK

Three companies have been shut down after helping to set up thousands of businesses which had no real presence in the UK:

Yunma Tianlong International Consulting Co., Limited, Busy Secretary Service Limited, and J&C Business (UK) Co., Limited supported overseas clients, mainly from China, to register businesses in the UK.

None of the companies were registered with HM Revenue and Customs (HMRC) as trust and company service providers (TCSPs), meaning they operated outside anti-money laundering rules.

Several of their client companies, which sold products such as pet supplies and women’s clothing, have also already been shut down by the courts after investigations found they gave customers a false impression of being genuine UK businesses. 

More than half of the client companies have had enforcement action taken by Companies House and investigations are ongoing. Additional informational can be found here.

Watch our latest episode on BIFA TV where Robert explains the importance of conducting due diligence checks using Companies House and other means.

The post Fraud in the Supply Chain: Why Verification Matters More Than Ever appeared first on British International Freight Association.