Updated: 22nd February 2024
Updated: 22nd February 2024
The Economic Crime and Corporate Transparency Bill 2022-23 (the “ECCT Bill”) was first introduced to the House of Commons on 22 September 2022 and is currently at the Report Stage in the House of Commons. This bill is a follow-up of The Economic Crime (Transparency and Enforcement) Act 2022, a previous economic crime measure, which was fast-tracked through Parliament in March 2022 in response to Russia’s invasion of Ukraine and established a new Companies House Register of Overseas Entities (“ROE”) where companies that own qualifying real estate in the UK must register.
The Bill aims to deliver:
While the ECCT Bill is currently in its infancy through Parliament, Companies House anticipates, subject to Parliamentary approval, the Bill to receive Royal Assent early 2023. For existing companies, directors, LPs and others affected by the new measures, the legislation’s transitional provisions will set aside periods for observing the new standards.
The Companies House reforms will certainly assist in strengthening the UK business climate and increase openness regarding UK corporations. However, the ability to put these changes into action will depend on having enough resources to ensure that these new powers can be used successfully. Other regulatory bodies such as the ICAEW and The Law Society have already expressed concerns on the challenges in implementing the ROE, particularly the laws that govern the verification process and liability on service providers, making it possible for them to be held accountable for verification even if it was unaware the information being provided was false when it was verified. The ECCT Bill will add another layer of complexity.
Directors will need to closely monitor the implementation of the ECCT Bill and in-house advisors may want to review current processes especially those in charge of a large number of UK subsidiaries. Corporate service providers will want to ensure that their current systems and processes for verification are robust enough to gain authorisation from Companies House, and once an ACSP, how this process will be managed across their client portfolio.
Shaun works in our company secretarial team supporting various client companies, including AIM listed, technology start-ups and SME companies.
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