On 22 September 2022, the House of Commons published the Economic Crime and Corporate Transparency Bill (the Bill).
The Bill is effectively the second part of a legislative package to prevent the abuse of UK corporate structures and tackle economic crime. It follows on from the Economic Crime (Transparency and Enforcement) Act 2022, which received Royal Assent on 15 March 2022.
The main elements of the Bill are:
- Broadening the Registrar of Companies’ powers so that the Registrar becomes a more active gatekeeper over company creation and custodian of more reliable data concerning companies and other UK registered entities such as LLPs and LPs – including new powers to check, remove or decline information submitted to, or already on, the register.
- Introducing identity verification requirements for all new and existing registered company directors, people with significant control, and those delivering documents to the Registrar. This will improve the reliability of the Registrar’s data, to support business decisions and law enforcement investigations.
- Providing the Registrar with more effective investigation and enforcement powers and introducing better cross-checking of data with other public and private sector bodies.
- Tackling the abuse of limited partnerships (including Scottish limited partnerships), by strengthening transparency requirements and enabling them to be deregistered.
- Amending the Register of Overseas Entities to maintain consistency with change to the Companies Act 2006.
- Creating powers to quickly and more easily seize and recover cryptoassets, which are the principal medium used for ransomware. The creation of a civil forfeiture power will mitigate the risk posed by those who cannot be criminally prosecuted but use their funds to further their criminality, or for use for terrorist purposes.
- Creating new exemptions from the principal money laundering offences to reduce unnecessary reporting by businesses carrying out transactions on behalf of their customers and giving new powers for law enforcement to obtain information to tackle money laundering and terrorist financing.
- Removing the need for a statutory instrument to be laid in order to update the UK’s high risk third country list.
- Enabling businesses in certain sectors to share information more effectively to prevent and detect economic crime.
- A measure removing the statutory fining limit to allow the Solicitors Regulation Authority to set its own limits on financial penalties imposed for economic crime disciplinary matters.
- Adding a regulatory objective to the Legal Services Act 2007 to affirm the duties of regulators and the regulated communities to uphold the economic crime agenda.
- Allowing the Serious Fraud Office (SFO) to use its powers under section 2 of the Criminal Justice Act 1987 at the ‘pre-investigation’ stage in any SFO case.