The Economic Crime (Transparency and Enforcement) Act 2022: a quick fix?

The Act is divided into three key parts discussed briefly below.

The Register of Overseas Entities (“ROE”)

The ROE, which commenced on 01 August 2022, requires that any “overseas entities” owning property in the UK must register the identity of their beneficial owners at Companies House, the UK’s registrar of companies, before 31 January 2023, and decisively keep that registration up to date. Failure to do so is regarded as a criminal offence which can include imprisonment.

The ROE applies retrospectively so all qualifying existing overseas entities must apply to be included on the ROE unless an exemption applies.

Overseas entities will then have an ongoing obligation to update their registration annually (even if only to notify that there are no changes) and must alert Companies House when a beneficial owner and/or managing officer is required to be removed from the ROE.

Unexplained Wealth Orders (“UWO”)

Unexplained Wealth Orders allow for the confiscation of property without proving criminality by reversing the burden of proof. Whilst UWOs are not new in the UK, the Act introduced substantial changes to make them easier to obtain and enforce.

Scepticism remains rife about the effectiveness of UWOs even with the new changes introduced by the Act.

Sanctions reforms

The Act amends the Policing and Crime Act 2017 and the Sanctions and Anti-Money Laundering Act 2018 by expanding information-sharing powers and crucially removing the requirement that people must have known or suspected that they breached sanctions law to receive a monetary penalty for such breaches.

The UK government has already announced that a bulkier supplement to the Act will follow in 2022/23. Perhaps to plug any hastily created gaps and loopholes.

---

Photo: David - stock.adobe.com