The Economic Crime and Corporate Transparency Bill has been introduced to Parliament, with what have been described as wide ranging reforms designed to bear down on kleptocrats, organised criminals and terrorists abusing the UK’s open economy.

The measures will build upon the earlier Economic Crime (Transparency and Enforcement) Act which, in the wake of Russia invading Ukraine and with lightening speed, received royal assent on 15 March 2022. Part 3 which came into force on 15 June 2022 made amendments to existing legislation on UK sanctions.

The new reforms proposed in the Bill include:

  • New powers for Companies House allowing it to 'check, challenge and decline incorrect or fraudulent information', making it 'a more active gatekeeper' over company creation;
  • Investigation and enforcement powers of Companies House will be upgraded, enabling it to cross check data with public and private partners, as well as report suspicious activity to security agencies and law enforcement;
  • Registration and transparency requirements of ‘limited partnerships’ will be tightened to help prevent abuse of these entities;
  • Additional powers given to law enforcement to seize and recover suspected criminal cryptoassets;
  • Reforms to give businesses more confidence to share information in order to tackle money laundering and other economic crime;
  • New intelligence gathering powers for law enforcement and removal of nugatory burdens on business;
  • Law-abiding businesses and investors across the UK to benefit from 'simplified filing requirements'.

The Bill also provides for increased powers to the SFO, with pre-investigation powers no longer limited to international bribery and corruption, meaning evidence can be gathered at an earlier stage in any SFO case. https://www.sfo.gov.uk/2022/09/22/new-economic-crime-bill-includes-plans-to-expand-sfos-investigative-powers/

The Bill will need to be debated and approved by Parliament before it becomes law.

Companies House will need sufficient resources to enforce the legislation. No assurances have been given that additional funding would be provided. As always, the key to enforcement is that it is properly resourced.