New crackdown on fraud and money laundering to protect the UK economy

The Economic Crime and Business Transparency Act will bolster the UK’s reputation as a place where legitimate businesses can thrive while driving the UK’s dirty money. The reforms require anyone registering a company in the UK to verify their identity and tackle the use of companies as a cover for crime or foreign kleptocrats.

Companies House’s reforms – the largest upgrade in 170 years – will also equip the organization with new powers to monitor, challenge and deny false or fraudulent information, making it a more active gatekeeper in company formation. Companies House’s investigative and enforcement powers will also be enhanced, allowing the organization to audit data with public and private partners, and report suspicious activity to security and law enforcement agencies.

The bill will also help prevent the misuse of limited partnerships – including those registered in Scotland, for money laundering and other nefarious purposes – by tightening registration and transparency requirements for these entities.

Law-abiding businesses and investors across the UK will benefit from simplified filing requirements and a more reliable business register to inform business and credit decisions. The reforms will ensure that small business owners, consumers and the public are better protected against fraudulent use of their identities and addresses.

Company Secretary Jacob Rees-Mogg said:

We want the UK to be the best place in the world to invest and start a business, but we must not allow this openness to be exploited by fraudsters who abuse the identities of innocent people, or corrupt elites who try their dubious transactions to disguise.

This landmark law will equip Companies House and law enforcement officers with the tools they need to stamp out criminals who try to hide their activities without burdening law-abiding companies with unnecessary bureaucracy. Above all, we tell investors through strict enforcement measures that the UK is only open to legitimate business.

Home Secretary Suella Braverman said:

The UK is not a home for dirty money. The government has taken unprecedented steps to prevent kleptocrats and organized criminals from abusing our open economy, and this bill goes even further.

With this bill, we give our law enforcement agencies greater powers and intelligence capabilities to stay one step ahead of criminals bent on keeping their corrupt assets out of reach.

Security Minister Tom Tugendhat said:

As a former chairman of the Committee on Foreign Affairs, I commended the government for the swift legislative action it took against black money after the invasion of Ukraine, but I pleaded with them to go further.

I am delighted that today we are introducing reforms that will make it much more difficult for kleptocrats to protect their ill-gotten gains and treat the UK as their safe. As Secretary of Security, I am determined to bring this vital piece of legislation into place to strengthen our fight against economic crime.

Law enforcement will also benefit from increased powers to compel companies to disclose information that may be related to money laundering or terrorist financing. The administrative burden surrounding confidentiality liability will be eased, allowing companies to share information to more proactively prevent and detect economic crime, including fraud and sanctions evasion.

The new law will make it easier and faster for law enforcement agencies such as the National Crime Agency to seize, freeze and recover crypto assets — the digital currency increasingly used by organized criminals to whitewash profits from fraud, drugs and cybercrime. to wash.

The use of this digital currency has increased significantly in recent years, with the Metropolitan Police reporting a large rise in cryptocurrency seizures last year. Strengthening the powers in the Proceeds of Crime Act will modernize legislation to ensure agencies can keep up with rapid technological change and prevent assets from financing further crime.

The package of measures builds on the previous Economic Crime (Transparency and Enforcement) Act, which was introduced after the Russian invasion of Ukraine. The law has made it much faster to impose harsh sanctions on Putin’s cronies – freezing their British assets and cutting money from the Kremlin’s war machine – and setting up the recently launched Registry of Overseas Entities to prevent corrupt to exterminate oligarchs who try to make ill-obtained profits through British real estate.

Director General of the National Crime Agency Graeme Biggar said:

Domestic and international criminals have spent years laundering the proceeds of their crime and corruption by abusing UK corporate structures and increasingly using cryptocurrencies. These reforms – long-awaited and very welcome – will help us fight both.

Chief Executive Louise Smyth of Companies House said:

We welcome the measures outlined in this bill, which represent the most significant and far-reaching changes to the UK business register in over 170 years of history and will enable us to play a much stronger role in making the UK a great place to do business.

If agreed, these changes will allow us to actively improve and maintain the integrity of the registry like never before; build confidence in our data, crack down on economic crime and further boost confidence in the UK economy.

While the magnitude and scope of these changes should not be underestimated, the work already done through our extensive and ongoing transformation program puts us in a strong position to implement them as quickly and efficiently as possible.

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