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Further legislation to tackle economic crime in the UK

In March 2022, in the wake of Russia’s attack on Ukraine, the UK government rushed through the Economic Crime (Transparency and Enforcement) Act 2022 (“ECA”). Given its speedy delivery, the ECA was focused on certain specific issues aimed at the laundering of dirty Russian money in the UK (as discussed in our previous article). However, the government is still under pressure to deliver further legislation to tackle wider issues concerning economic crime in the UK. To that end, the government has recently announced a further Economic Crime and Corporate Transparency Bill which it states will deliver “…a suite of wider-ranging reforms to tackle economic crime and improve transparency over corporate entities.”

Summary

  • The government remains under pressure to deliver wider reforms to tackle economic crime in the UK
  • The Economic Crime and Corporate Transparency Bill aims to create an economic environment where legitimate business can thrive
  • The Bill includes significant reforms to Companies House including identity verification
  • The Bill is a welcome progression following the earlier ECA which was inevitably narrow in its focus

The Economic Crime and Corporate Transparency Bill

The Bill is said to focus on those seeking to take advantage of and abuse the UK’s financial system. The Bill aims to strengthen the UK’s reputation “…as a place where legitimate business can thrive, whilst driving dirty money out of the UK.” There are five key areas upon which the Bill is focused; these are:

  1. Companies House reform including identity verification for all new and existing registered company directors, People with Significant Control and those delivering documents to the Registrar. The Registrar will have new powers to check, remove or decline information submitted to, or already on, the companies register. Companies House will have the ability to cross-check data with other public and private sector bodies, and proactively share information with law enforcement bodies.
  2. Prevention of the abuse of limited partnerships by tightening registration requirements, requiring partnerships to maintain a connection with the UK, increasing transparency requirements and enabling the deregistration of limited partnerships which are dissolved or no longer carrying on business.
  3. Further powers to seize and recover suspected criminal cryptoassets by way of amendments to criminal confiscation powers and civil recovery powers under the Proceeds of Crime Act 2002.
  4. Information sharing reforms by enabling businesses in certain situations to share information by disapplying civil liability for breaches of confidentiality when information is shared in order to combat economic crime.
  5. New intelligence gathering powers for law enforcement including the strengthening of the National Crime Agency’s Financial Intelligence Unit’s ability to obtain information from businesses relating to money laundering and terrorist financing.

Further legislation is necessary to keep up the pressure on those who seek to benefit from a general lack of transparency in corporate structures and gaps in knowledge and information caused by a lack of information sharing between public and private sector organisations. Still, legislation in itself is not enough, and the government needs to be ready to properly resource those organisations tasked with enforcement.

Should you suspect that you are a victim of fraud or other wrongdoing, please do not hesitate to get in touch at hello@tenetlaw.co.uk

Published on October 7, 2022

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