The Economic Crime and Corporate Transparency Act came into force today with the aim of fighting fraud, counter corruption and support legitimate business.
This Act supports UK authorities to proactively target organised criminals and others seeking to abuse the UK’s open economy, highlighting the needed for tighter verification of company directors.
As a result, Companies House will receive enhanced capabilities to:
- verify the identities of company directors;
- remove fraudulent organisations from the company register; and
- share information with criminal investigation agencies.
Further these law enforcement agencies will receive greater powers to take action based on the enhanced information being shared to them. Their will have greater powers to seize, freeze and recover cryptoassets, and there will be legal reforms which will allow the courts to dismiss fraudulent lawsuits. The law enforcement agencies aren’t the only ones with enhanced powers following Royal Assent, reforms will enable prosecutors to hold large corporations accountable for any malpractice.
Suella Braverman, Home Secretary said:
“I am committed to ensuring criminals do not profit from their offending and this landmark act will help law enforcement clampdown on the tactics they use.
It will have a big impact on our ability to fight organised crime, including terrorist funding, fraud and money laundering, and that will ultimately help keep us all safe.”
Business Minister Kevin Hollinrake, said:
“We’re providing Companies House with the tools to take a much harder line on criminals who take advantage of the UK’s open economy, ensuring the reputation of our businesses is not tarnished by the UK playing host to the world’s scammers.
These reforms will remove the smoke and mirrors around companies hiding behind false identities, provide further protection to the public from companies fraudulently using their addresses, and deliver better data to support business and lending decisions across the economy, enhancing the UK’s reputation as a great and safe place to do business.”
Alex Chalk, Lord Chancellor said:
“We will not stand by while wealthy individuals abuse our courts with malicious lawsuits designed to gag reporters exposing their misconduct.
This act reinforces our unwavering commitment to protect freedom of speech, and end the brazen exploitation of our legal system by corrupt elites.”
These developments are some of the largest seen in the powers available to Companies House in their 180-year history.
Now the act is in force, steps to improve the quality of information on the company register will be actioned quickly. One initial step will be to remove all invalid registered office addresses, which can be used fraudulently to set up companies.
These enhanced verification checks will ensure the identities of people setting up and managing companies are legitimate with the purpose of preventing criminals from both creating and hiding behind false names or registering companies under fictional names.
This will go some way in preventing fraudulent appointments as well prohibiting people involved in money laundering schemes from hiding behind false names. Something that is also a particular focus for the SRA, with the warning regarding the need for more thorough assessments for anti-money laundering purposes.
Nick Emmerson, President of the Law Society of England and Wales said:
“We welcome Companies House getting new powers, which will enable them to be more active in preventing the creation of, and shutting down, fraudulent companies.
These powers should help to give people more confidence that companies have put correct information onto the register.
We look forward to working with Companies House to make sure that the powers introduced are effective in minimising fraud, but at the same time they do not put onerous burdens onto legitimate businesses.”
