Economic Crime and Corporate Transparency Bill: An overview
On 15 March 2022, the Economic Crime (Transparency and Enforcement) Act 2022 (“the Act”) was enacted.
The Act, which was fast-tracked in light of Russia’s invasion of Ukraine:
- allows the government to move faster and harder when imposing sanctions;
- created a Register of Overseas Entities to help crack down on foreign criminals using UK property to launder money; and
- reformed and strengthened the UK’s Unexplained Wealth Order regime to better support law enforcement investigations.
The Bill
The government also committed to bring forward the Economic Crime and Corporate Transparency Bill (“the Bill”) to deliver a suite of wider-ranging reforms to tackle economic crime and improve transparency over corporate entities.
It is intended that the Bill will deliver:
- reforms to Companies House;
- reforms to prevent the abuse of limited partnerships;
- additional powers to seize and recover suspected criminal cryptoassets;
- reforms to give businesses more confidence to share information to tackle money laundering and other economic crime; and
- new intelligence gathering powers for law enforcement and removal of nugatory burdens on business
Limited Liability Partnerships (“LLPs”)
Any entity which registers at Companies House will fall within scope of the reforms. This includes LLPs. Secondary legislation will be passed in due course which adapts company law, as amended by the Bill, to the law governing LLPs.
Articles
This page is a gateway to other articles on icas.com which have been prepared to inform and support ICAS Members and their clients in understanding some of the most important measures contained in the Bill.
- The role and powers of the Registrar of Companies
- Company names
- Identity verification
- Personal information
- Company accounts
- Companies House fees
- Limited partnerships
- Improving transparency of company ownership
- Cryptoassets
Awareness
ICAS encourages its Members to give early consideration to the measures proposed by the Bill and to discuss with clients and software suppliers. It will be particularly important that Members are fully aware of the proposals surrounding identity verification, transparency requirements and changes to how companies report information and what information they report, when filing their annual accounts with Companies House.
Progress and commencement
The Bill has currently reached 2nd reading stage in the House of Lords as it makes its passage through Parliament.
A number of the measures noted within the articles will require consequential changes and new secondary legislation and guidance, as well as system development, following Royal Assent of the Bill.
Sanctions
The government will provide the Secretary of State with a power to introduce a financial penalty regime via secondary legislation which will enable the Registrar to impose financial penalties directly, as an alternative to pursuing criminal prosecution through the courts. This financial penalty regime will sit alongside criminal sanctions.
The government will also amend or create offences in relation to:
- the Registrar of Companies’ new powers
- new requirements for Authorised Corporate Service Providers
- identity verification
- company names
- limited partnerships
- the general false statement offence
- the protection of personal information