PIMFA
Economic Crime and Corporate Transparency Act
The Economic Crime and Corporate Transparency Act (ECCT) introduces additional powers to allow UK authorities to proactively target organised criminals.
- Companies House Reform
The Act gives enhanced powers to Companies House to improve transparency over UK companies, whilst delivering a more reliable companies register to underpin business activity.
- Identity verification for all new and existing registered company directors, People with Significant Control, and those delivering documents to the Registrar.
- Registrar to become a more active gatekeeper over company creation and custodian of more reliable data, including new powers to check, remove or decline information submitted to, or already on, the companies register.
- Improving the financial information on the register so that the register is more reliable, complete and accurate,
- Providing Companies House with more effective investigation and enforcement powers and the ability to share information with criminal investigation agencies
- Failure to prevent fraud
The government has created a new failure to prevent fraud offence to hold organisations to account if they profit from fraud committed by their employees. Under the new offence, an organisation will be liable where a specified fraud offence is committed by an employee or agent, for the organisation’s benefit, and the organisation did not have reasonable fraud prevention procedures in place. Only large organisations are in scope.
- Identification Doctrine
The government has reformed corporate criminal liability laws for economic crimes to hold corporations liable in their own right for economic crime. This will strengthen the ability to apply corporate liability to the makeup of modern corporations, particularly large complex structures, and deter instances where senior managers use their authority granted under the corporation to commit economic crimes.
- Strengthening Anti-money-laundering powers
The bill will strengthen anti-money laundering powers, enabling better information sharing on suspected money laundering, fraud and other economic crimes.
The reforms will:
- Enable businesses in certain situations to share information more easily for the purposes of preventing, investigating or detecting economic crime by disapplying civil liability for breaches of confidentiality.
- Enable proactive intelligence gathering by law enforcement.
- Focus private sector and law enforcement resources on high value activity, reducing the reporting burden on businesses and enabling greater prioritisation of law enforcement resource 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.
- Other reforms:
- Tackle misuse of limited partnerships
- Greater powers to law enforcement agencies to seize, freeze and recover cryptoassets
Find out more about the Economic Crime Plan 2.
