The Financial Services Authority (FSA) of Seychelles has launched an investigation into the allegations made against the International Corporate Service Provider (ICSP), Alpha Consulting, based in the capital Victoria.
This follows the collaborative news reports published online by the British Broadcasting Corporation (BBC), Seychelles Broadcasting Corporation (SBC) and Finance Uncovered, and the airing of an SBC documentary last week.
In a press communique on November 2, FSA said it condemns any unlawful business practices by any licensee and the use of registered entities for illicit purposes.
It said that local and international media have issued press reports alleging the involvement of a licensed firm, an ICSP, and other legal entities in a scheme to conceal the true ownership of limited partnerships registered in the UK.
"The reports allege that the firm has helped to form more than 900 UK partnerships under the laws of the UK which have allegedly used secrecy loopholes to attempt to conceal their true owners. The reports also make reference to certain persons that have been identified within the reports as being Seychelles legal and natural persons," said FSA.
The media reports alleged that Alpha Consulting allowed others to establish companies that can operate in the UK without the identity of their real owners being known because a 100-year-old UK law made this possible.
The investigation by the BBC, Finance Uncovered and SBC "has analysed internal Alpha documents and thousands of company records to identify some of the people who secretly benefitted from the work of the offshore firm, based in the island nation in the Indian Ocean."
"The investigation also reveals that Alpha, run by a Russian businesswoman named Victoria Valkovskaya, helped to create 927 limited partnerships - one in five of those registered in England, Wales and Northern Ireland since 2017," said BBC news service.
Meanwhile, the Finance Uncovered report noted that Valkovskaya denied any wrongdoing and said that she had sent suspicious transaction reports (STRs) to the Financial Intelligence Unit after receiving new information from the journalist investigators.
Finance Uncovered also noted "There is no suggestion that ... anyone else connected to Alpha Consulting acted illegally by fronting UK firms, or that they had any involvement in the management of these businesses. Decisions at these firms were taken by Alpha Consulting's end clients."
The FSA said that "should evidence of regulatory breaches be found from this investigation, the FSA will hold any individual responsible to account through the necessary enforcement action in accordance with the law."
It added that together with other relevant authorities, in the Seychelles, it is committed to effectively implementing the Financial Action Task Force (FATF) Recommendations. It is also ensuring that licensees and regulated entities under its supervisory purview remain compliant with the applicable laws and regulations.
The Authority said it has "no tolerance for any activities which undermine the reputation and financial stability of the jurisdiction. The FSA remains committed to working collaboratively with other international bodies to mitigate the risks inherent to the sector including, but not limited to, the AML/CFT risks."
Seychelles, an archipelago in the western Indian Ocean, was placed back on the EU blacklist last month, two months after the Global Forum on Transparency and Exchange of Information for Tax Purposes maintained the island nation's rating as "partially compliant."
The small island state then called for a review of the European Council listing criteria for its list of non-cooperative jurisdictions for tax purposes after it was added to the EU's blacklist in October this year.
The main reason for Seychelles' being blacklisted was because of difficulties encountered in responding to the exchange of information requests.
Source: Seychelles News Agency