The Economic Crime (Transparency and Enforcement) Bill – Criminal Litigation, Investigations and Regulatory Update

The proposed new bill provides for measures to enable greater transparency and to strengthened Unexplained Wealth Order powers.

Introduction – The Economic Crime (Transparency and Enforcement) Bill

The current war in Ukraine has prompted the UK Government to bring forward the implementation of measures designed to further tackle economic crime. A proposed measure being expedited is the Economic Crime (Transparency and Enforcement) Bill (the “Bill”). The Bill includes measures to shed greater transparency to identify foreign owners of UK Property, enhanced powers with regards to Unexplained Wealth Orders (“UWO”s), and limits on orders for costs in UWO cases.

History to the new Bill

In December 2019 the House of Commons Treasury Committee (the “Treasury Committee”) found various regulatory and legislative failings in the way economic crimes are dealt with. Subsequently, on 23 October 2020 the Treasury Committee opened an inquiry into economic crime. However, the “Eleventh Report of Session 2021-22” by the Treasury Committee published on 2 February 2022 found that “since 2019, it appears that economic crime has not reduced but has instead continued on an upward trend” and that “economic crime seems not to be a priority for law enforcement”.

The February 2022 Treasury Committee Report Summary

The Report summary was not all bad news; the following positive observations were made:

• That the FCA had adopted a new assertive approach (this was following the FCA’s successful prosecution of Natwest Bank for breaches of the anti-money laundering regulations).
• That the Suspicious Activity Reports (“SAR”) reform programme is likely to improve anti-money laundering (“AML”) systems.

However, the report expresses disappointment with such issues as the fact that:

• There are still so many crypto firms not registered for AML.
• The SAR reform programme was not complete.
• The Government has not implemented reform of corporate criminal liability.
• Reforms of Companies House still needed to be made.
• The Registration of Overseas Entities Bill is still awaiting introduction.

Features of the new Bill – enhancement of investigatory ability

Register of overseas entities

The new Bill, therefore, aims to shed transparency on beneficial owners of overseas entities which hold land in the UK. The Bill will do this by creating a publically available register of such entities brought about by requiring overseas companies and individuals to declare the beneficial owners of all UK property bought over the last 20 years. This will correct the current disparity, whereby UK entities purchasing land in the UK have to provide certain information to Companies House, whereas overseas entities do not.

UWOs

The Bill also further enhances law enforcement agencies’ investigative abilities by amending and arguably strengthening the investigative powers bestowed on various investigation and prosecuting agencies by way of UWOs. The Bill clarifies the entities to which an UWO can be applied (and in doing so increases the scope of entities), gives more powers to extend the period for which an interim freezing order has effect (giving agencies longer to investigate) and limits the orders of costs which can be made against investigating agencies.

Separately, it may be of interest that the UK government have also recently proposed the introduction of an economic crime levy.

How Gherson can assist

Anyone who is concerned about these new measures, and specifically those relating to UWOs and would like advice should not hesitate to contact a member of our team. Our firm has considerable experience handling asset forfeiture and confiscation proceedings and is still instructed in the ongoing legal challenge to the first ever UWO which has been running now since 2018.

For those who would like advice any crypto regulatory issues, including those who have had issues with the registration process, our specialist regulatory and compliance team can guide individuals and companies through the process.

If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on Twitter, Facebook, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2022

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