Economic Crime and Corporate Transparency Act 2023

Summary

Reforms to the Economic Crime and Corporate Transparency Act aim to tackle economic crime and improve transparency over corporate entities. These changes have been in the pipeline for a while. This article is aimed at clearing up what these changes mean for corporate entities in the UK, so they can understand how the act will affect their business as well as outlining the impact it will have on companies and limited partnerships. Law enforcement agencies and judicial bodies have been crying out for new powers for a long time. It gives law enforcement agencies the ability to tackle corporate malpractice and forces them to clean their acts up as a preventative measure to go with increased powers of prosecution. The major reforms mean prosecutors can hold corporations criminally liable for malpractice. The new FTP fraud offence means corporates can no longer bury their head in the sand and avoid consequences when an employee is convicted of fraud that the company benefits from. Instead, under the new law they too will be criminally liable for the actions of their employees. Additionally, a legal principle known as the ‘identification doctrine’ will hold businesses to account when.

Key information

• •Gave the Government the ability to impose sanctions at a quicker pace
• •Created a register of overseas entities which targets criminals from overseas using UK property to launder money – this was rushed through in the wake of Russian oligarchs attempting to launder money following the Russia-Ukraine war
• •Reformed the unexplained wealth order
• •Make registration requirements more thorough
• •Require limited partnerships to have a connection to the UK
• •Enforce higher transparency
• •Give the Registrar the ability to strike off businesses which are: dissolved, no longer a going concern, when a court judges it’s in the public interest
• •Civil liability to be suspended for firms breaching confidentiality to share information on economic crimes. This means money laundering can be investigated and prevented more quickly
• •Crime agencies including the National Crime Agency’s Financial Intelligence Unit (FIU) to investigate more proactively into suspected money laundering and terrorist financing, as the requirement for a pre-existing Suspicious Activity Report (SAR) will no longer have to be completed and submitted before an Information Order (IO) can be made
• •Private sector and law enforcement resources are to be directed to high-value activity by expanding the “types of case in which businesses can deal with clients’ property without having to first submit a Defence Against Money Laundering (DAML) SAR”
• •More than £36 million turnover
• •If your organisation is within the scope of the failure to prevent limits, you should carry out a risk assessment

Practical guidance

• •Source: [Economic Crime and Corporate Transparency Act 2023](https://lawhive.co.uk/knowledge-hub/corporate/economic-crime-and-corporate-transparency-act-2023)

Related topics