Ukraine has seized the assets of a Scottish "tax haven" firm linked to an allegedly corrupt politician.
In the latest of several high-profile scandals involving controversial Scottish limited partnerships or SLPs in the former Soviet Union, a court in Kiev has issued an order to "arrest" the account of Edinburgh-registered Rexlord Systems.
Ukraine's elite National Anti-Corruption Bureau or Nabu sought the court action as former Olympic showjumper and MP Oleksandr Onyschenko - currently on the run in London - was added to the country's lists of "most wanted" fugitives.
Read more: Oxfam - close legal loophole that's turning Scotland in to a tax haven
Nabu in an official statement said that Solomianka district court in Kiev, the Ukrainian capital, had approved the seizure of some $7m in accounts held in the name of Mr Onyschenko himself, Rexlord Systems and another firm based in Cyprus, all at two Latvian banks.
Mr Onyschenko. 47, denies any wrongdoing and says he is the victim of a vendetta. The former Olympic showjumper - he competed at London 2012 - fled Kiev last month just before his fellow MPs overturned his parliamentary immunity so police could arrest him.
The politician, who had been scheduled to appear at the Rio Games this summer, is accused of skimming cash from sales made by Ukraine's national gas production company, Ukrgazvidobuvannya. This week he told a London newspaper that he had fled to Britain because his life was in danger.
He said: "In Ukraine the president organises everything to kill me, that's why I came to London. I came to London because I feel safe here and I can prove everything in a European court."
His case has once again highlighted the role played by SLPs in the former Soviet Union, where they are routinely advertised as secretive vehicles for avoiding tax.
International aid charity Oxfam yesterday began a major lobbying drive to get politicians at Westminster to close the legal loophole that effectively allows SLPs to be exploited as mini tax havens.
Read more: Oxfam - close legal loophole that's turning Scotland in to a tax haven
Critics - including SNP, Labour, Green and Liberal Democrat politicians - warn SLPs are tarnishing Scotland's international reputation.
Rexlord Systems was incorporated last year by two partners, Voxpoint Inc and Goldstein AG which are based in the classic Caribbean tax haven of Dominica.
It is registered at a virtual office and PO box facility in the Scottish capital used by hundreds of other shell firms, including another SLP, Winglex Inter, which was named in another high-profile corruption investigation at Ukraine's state vodka concern.
Winglex Inter was set up by the same Dominica partners as Rexlord Systems and registered by the same English company creation business.
There is no suggestion that these company formation agents or the hosts of registered offices have any knowledge of an SLP’s activities.
The Onyschenko case has also highlighted how Scottish, British and other shell companies are allegedly used in conjunction with Latvian banks to launder money from Ukraine, Russia, Moldova and other countries.
Court documents show that the accounts identified by Mr Onsychenko's prosecutors were in Trasta Komercbanka and Privatbank.
Read more: Oxfam - close legal loophole that's turning Scotland in to a tax haven
In a sign of serious and growing international concern over Latvian banking, Trasta Komercbanka has had its licence revoked by the European Central Bank amid allegations that it lacked the internal controls that might have prevented the laundering of billions of dollars out of Russia.
Meanwhile, Privatbank, which is Ukrainian-owned, was late last year hit by a record Latvian fine for violations of anti-money-laundering regulations. The bank has history with SLPs. Privatbank allowed the opening of an account in the name of an SLP later used as part of the historic alleged looting of $1bn from Moldovan banks in 2014.
It was this Moldovan scandal that first signalled that Scottish partnerships were being exploited en masse in the former Soviet Union.
Agencies selling off-the-peg SLPs in the former Soviet Union routinely offer to help clients use such Scottish companies to open a Latvian bank account.
At least two high-profile agencies marketing SLPs in recent years, FiveConsult and Arran Consulting, recommend accounts at another Latvian institution, Rietumu Banka.
This bank, which was also fined last year for breaching anti-money-laundering regulations, is currently under investigation by French authorities looking in to an alleged 700m-euro tax avoidance scheme. As The Herald reported last week, Celtic shareholder Dermot Desmond owns nearly a third of Rietumu Banka and sits on its supervisory board. He has declined to comment on the bank’s problems.
A vendor of off-the-peg SLPs, FiveConsult, recommending accounts at Rietumu Banka
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