What is the Economic Crime and Corporate Transparency Bill?

Today (13 October 2022), the House of Commons will consider the Economic Crime and Corporate Transparency Bill (the “New Bill”). 

This is not to be confused with the Economic Crime (Transparency and Enforcement) Bill (the “Earlier Bill”), which was the focus of an earlier Gherson blog titled “What is the Economic Crime (Transparency and Enforcement) Bill and what are the practical implications?”

As was discussed in the previous blog, the Earlier Bill proposes measures that will, in conjunction, it is hoped, assist UK investigating agencies with identifying and preventing foreign owners from laundering their money by means of UK assets. 

As such, the proposals in the Earlier Bill brought about greater transparency to try and prevent foreign owners from laundering their money in UK property, and enhanced law enforcement agencies’ investigative abilities by amending and, arguably, strengthening the investigative powers bestowed on various investigation and prosecuting agencies by way of Unexplained Wealth Orders.  

Introduction – The Economic Crime and Corporate Transparency Bill

The New Bill is yet further evidence of the Government’s attempted crackdown on illicit finance. The New Bill proposes measures to give enhanced powers to law enforcement and regulators, and also brings the proceeds of crime legislation up-to-date by enabling law enforcement to seize and recover cryptoassets when they amount to the proceeds of crime, or are associated with illicit activity.  Indeed, previous Gherson blogs have examined the use of cryptoassets to both commit and also launder the proceeds of financial crimes.

Enhanced law enforcement agencies information-gathering powers

The New Bill proposes enhanced powers to both the National Crime Agency (“NCA”) and the Serious Fraud Office (“SFO”), two of the key agencies in the UK’s fight against illicit financial crime.  The New Bill specifically proposes enhancing the powers of these agencies, which can be utilised at the earlier stages of an investigation (or even before an investigation has been opened).

With regards to the NCA, the new Bill proposes to now enable the NCA to make use of Information Orders under the Criminal Finances Act 2017 against a firm before the latter has submitted a suspicious activity report (“SAR”).  Under the current rules, the NCA must wait until a SAR has been submitted.

The new Bill also proposes increasing the SFO’s pre-investigative powers.  Whereas currently, the SFO can only  use its compelled information-gathering powers prior to opening an investigation into bribery and corruption, the new Bill proposes extending the use of these compelled powers before an investigation has been opened in relation to a wider variety of offences.  This will give the SFO greater investigative powers at an earlier stage in an investigation, and could ultimately lead to more investigations being opened into wider financial criminal offences.

Indeed, Thomas Cattee recently provided comment to Law360 in an article titled “Economic Crime Bill Offers Big Reforms To Tackle Dirty Funds”.

Ultimately, these proposed measures will therefore increase the information- gathering powers of these two agencies, which will enhance their ability to investigate and prosecute financial crimes.

Enhanced powers to recover criminal cryptoassets

Gherson Solicitors’ criminal litigation, investigations and regulatory team has written a whole series of blogs about cryptoassets and financial crime.  This includes such topics as Non-Fungoble tokens and insider trading, crypto assets and insider trading and a whole Tech and Crime Series for Finextra.

Indeed, in anticipation of the increase in criminals using cryptoassets as a way to launder the proceeds of crime, the New Bill provides for amendments to existing legislation, which will give additional powers to law enforcement to recover suspected criminal cryptoassets.

Other additions

The New Bill also proposes various other measures, including assistance in the fight against financial crimes, which will be imposed should the bill be implemented.

These include:

• Broadening the powers of Companies House to request information and therefore enable it to be a more accurate store of information;
• New exemptions to the money laundering offences to attempt to reduce unnecessary reporting in certain circumstances;
• Enabling business in certain sectors to more easily share information to attempt to prevent and detect financial crime; and
• Removing the Solicitors Regulation Authority statutory fining limit, enabling the regulator to set its own limits on fines for financial crime disciplinary matters.

Conclusion

The New Bill squarely aims to provide UK law enforcement with additional powers to investigate, and, if appropriate, prosecute those accused of financial crimes. This includes increased powers to seize and detain the proceeds of crime. 

The increased powers bestowed on two of the UK’s main financial crime law enforcement agencies, and various other measures to assist in the fight against financial crime, will certainly have the potential to result in more financial crime investigations being opened, which could ultimately lead to more prosecutions.

How Gherson can assist

Gherson’s white-collar crime and regulatory team have extensive experience with the matters outlined above, and would be able to provide advice and assist with the potential provisions in the New Bill.

Please do not hesitate to contact us for further 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

View all news & Insights