Economic Crime Bill: Lifting the fog

After years in the making, the Economic Crime (Transparency and Enforcement) Bill was introduced in the House of Commons on 1 March 2022.

Given the situation in Ukraine, this measure is being enacted as a priority. A second reading and all remaining Commons stages were scheduled for 7 March 2022, with the bill expected to become law later this month.

It mandates a new approach in several areas, particularly:

• The creation of a new Register of Overseas Entities to be held by Companies House.
• All overseas entities that buy land/property will be required to join the register and identify their ultimate beneficial owner(s). This identification will also apply retrospectively to existing property owners for acquisitions made in the last 20 years in England and Wales and 8 years in Scotland.
• The Unexplained Wealth Orders regime is being revised and expanded to make it easier to determine beneficial owners of assets of all types and to confiscate those that have been acquired from resources that cannot be proven legitimate.
• Various measures to prevent and punish sanction breaches. These include the introduction of a ‘strict civil liability test’ in relation to sanctions breaches which brings the UK regime in line with the US equivalent, and makes it easier for the Office of Sanctions Implementation to impose significant financial penalties against those that breach sanctions.

At the same time the bill was introduced, a long-awaited Corporate Transparency and Register reform white paper was also issued. This proposes a series of changes in general company law and procedure that, if enacted, will complement the Economic Crime Bill – in particular, regarding the verification of the identity of directors and controlling parties. These changes will also amend the administrative and accounting filing requirements for micro and small entities.

While it is still relatively early days on this latter measure, we will be working diligently with Companies House during consultation forums to ensure that we provide the required compliance updates to our Accounts Production solutions ahead of the implementation date.

IRIS solutions are here to help today

IRIS Elements Anti-Money Laundering (AML) already has several key functions that will assist. These include electronic identity checks and business reports, suspicious activity reports and KYC assessments. These are all designed to ensure full compliance with existing AML regulations. However, they will also help you comply with this latest and much more stringent legislative approach and will be upgraded if required.

More information on IRIS Elements AML can be found here.