The Economic Crime and Corporate Transparency Bill

What is the Economic Crime and Corporate Transparency Bill?

For advice on how Safecall can help you with The Economic Crime and Corporate Transparency Bill compliance, call us on +44 (0) 191516 7720 or send us an email to info@safecall.co.uk. 

Return to legislation overview page

The UK's robust and open economy attracts global businesses, but this openness also exposes the nation to risks such as fraud, money laundering, and organised crime. To combat these threats, the UK government has taken decisive action. In response to Russia's invasion of Ukraine, they swiftly implemented the Economic Crime (Transparency and Enforcement) Act in 2022. Building on this momentum, the government has proposed the Economic Crime and Corporate Transparency Bill, which aims to further tackle economic crime and enhance transparency over corporate entities. This article explores the key provisions of the bill and how it will strengthen the UK's fight against economic crime.

Companies House Reform

The bill seeks to reform the role of Companies House, the registrar of UK companies and legal entities. The proposed reforms include introducing identity verification for directors and individuals with significant control, enhancing the accuracy of Companies House data. With broader powers, the Registrar can become a more active gatekeeper, ensuring reliable data on the companies register. Additionally, improvements will be made to the financial information on the register, reflecting advancements in digital technology and enabling better business decisions. The bill also empowers Companies House with more effective investigation and enforcement powers, facilitating proactive sharing of information with law enforcement bodies to combat fraudulent activities.

Limited Partnership Reform

Recognising the misuse of limited partnerships, particularly Scottish limited partnerships, the bill aims to tighten registration requirements and increase transparency. Limited partnerships will be required to maintain a connection to the UK, and the Registrar will have the authority to deregister partnerships that no longer carry on business or pose a threat to public interest. These reforms will ensure that limited partnerships are not exploited for illicit purposes while modernising the regulatory framework surrounding them.

Cryptoassets

The bill addresses the growing concern of cryptoassets being used for criminal activities such as money laundering, fraud, and ransomware attacks. To tackle these issues, the bill provides law enforcement agencies with additional powers to seize and recover cryptoassets associated with illicit activities. By amending existing criminal confiscation and civil recovery powers, enforcement agencies will be better equipped to combat the criminal use of cryptoassets.

Strengthening Anti-Money Laundering Powers

Recognising the importance of collaboration between businesses and law enforcement agencies in combating economic crime, the bill strengthens anti-money laundering powers. It enables businesses to share information more easily in certain situations without facing civil liability for breaches of confidentiality. This encourages proactive intelligence gathering by law enforcement and empowers the National Crime Agency's Financial Intelligence Unit to obtain information from businesses regarding money laundering and terrorist financing. Furthermore, the bill reduces the reporting burden on businesses, allowing for greater prioritisation of law enforcement resources by expanding the types of cases in which businesses can deal with clients' property without submitting a Defence Against Money Laundering Suspicious Activity Report.

Conclusion

The Economic Crime and Corporate Transparency Bill represents a significant step in the UK's fight against economic crime. Through reforms to Companies House, limited partnerships, cryptoassets, and anti-money laundering powers, the bill aims to strengthen transparency, enhance law enforcement capabilities, and protect the nation's economy from illicit activities. By clamping down on kleptocrats, criminals, and terrorists, the UK is sending a strong message that it is committed to maintaining its reputation as a place where legitimate businesses can thrive while driving out dirty money.