In recent years, the UK government has been seeking to tackle ever-growing financial crime and money laundering.

In this post, we summarise the Economic Crime and Corporate Transparency Bill (the Bill) published on 22 September 2022 as well the expansion of the Serious Fraud Office’s (SFO) investigative powers under the Bill in an effort to help fight financial crime. The Bill also proposes significant reform to the role of Companies House, giving it improved investigation and enforcement powers (see here) and makes changes to strengthen regulators’ powers to seize and detain cryptoassets.  

What SFO powers are being expanded?

One of the key features of the Bill is the expansion of the SFO’s section 2 powers – these are the powers under the Criminal Justice Act 1987 (the CJA) which allow the SFO to compel individuals and companies to share information or documents in relation to a suspected crime.

At present, the SFO only have powers to compel disclosure at the pre-investigation stage under section 2A CJA in cases of potential international bribery and corruption (and cannot compel disclosure at the pre-investigative stage when it comes to suspected cases of fraud or domestic bribery and corruption).

The Bill looks to remove this limitation, allowing the SFO to use their section 2A powers to compel disclosure before an investigation has formally begun in all cases of fraud, bribery and corruption.

What are the benefits of expanded SFO powers?

Under the existing legislation, the SFO is reliant on third parties voluntarily providing information, and due to confidentiality obligations to their clients, banks and financial institutions cannot share certain information unless compelled. Under the Bill, the expanded powers would allow evidence to be gathered at a much earlier stage in domestic cases, and consequently, enable the SFO to move more quickly and prevent evidence from being disposed of and assets dissipated..

The Chief Intelligence Office at the SFO, John Keilty notes how: “These legislative changes would have a positive impact on our operating capability, not only shortening the length of our cases, meaning justice for victims is delivered more quickly, but also reducing the number of potential investors at risk and helping us secure key evidence at pace.”

If approved, the Government hopes that the Bill will strengthen the UK’s reputation as a place where legitimate businesses can thrive and encourage investment, whilst preventing criminals from abusing the economy. The Bill will have its second reading in October 2022.