On 28 February 2022, there was published on the UK government’s website The Economic Crime (Transparency and Enforcement) Bill 2022 (Bill) and a factsheet regarding the Register of Overseas Entities.
The Bill has three main objectives:
- Prevent and combat the use of land in the UK for money laundering purposes by increasing the transparency of beneficial ownership information relating to overseas entities that own land in the UK. The Bill therefore creates a register of the beneficial owners of such entities. The register will be held by Companies House and made public.
- Reform the UK’s Unexplained Wealth Order (UWO) regime to enable law enforcement to investigate the origin of property and recover the proceeds of crime. The measures in the Bill aim to strengthen the UK’s fight against serious economic crime; to clarify the scope of UWO powers; and to increase and reinforce operational confidence in relation to UWO powers.
- Amend financial sanctions legislation, including the monetary penalty legal test and information sharing powers to help deter and prevent breaches of financial sanctions.
Further commentary on the Bill can be found in the explanatory notes.
The factsheet regarding the Register of Overseas Entities mentions that:
- The measures will apply to foreign owners of UK property. They will apply to:
- any company or similar legal entity that is governed by the law of a country or territory outside the UK (overseas entity)
- individuals who have significant influence or control over the entity, e.g. they hold 25% or more of the shares or voting rights (beneficial owners)
- An overseas entity will be required to identify its beneficial owner(s) and register them with Companies House. Information supplied to the register will be required to be verified. Once registered, an overseas entity ID number will be provided and the entity will be required to update its information annually, until such time as it successfully applies to be removed from the live register of overseas entities. To register title to land, an overseas entity will have to demonstrate it is registered and must comply with the duty to update information.
- Implementation will proceed at pace following Royal Assent of the Bill.
The Government intends to ask Parliament to expedite the parliamentary progress of the Bill.