The Economic Crime and Corporate Transparency Act 2023 (ECCTA), enacted in October 2023, signifies a sweeping reform of UK company law aimed at combating economic crime and enhancing corporate transparency. Building upon the Economic Crime (Transparency and Enforcement) Act 2022, ECCTA introduces pivotal measures that will reshape regulatory requirements for UK businesses.
ECCTA introduces critical reforms to bolster the UK's defences against economic crimes such as fraud, money laundering, and abuse of corporate structures:
Expanded Registration Requirements: The Act expands the Register of Overseas Entities (ROE), compelling overseas entities that own UK property to disclose their beneficial owners. This amendment closes loopholes that previously obscured beneficial ownership, reducing opportunities for money laundering through UK real estate.
Enhanced Compliance Standards for Companies House: Companies House will enforce stricter verification protocols for director identities and registered office addresses. These changes aim to enhance the accuracy of corporate information and prevent the misuse of company structures for illicit purposes.
Introduction of the 'Failure to Prevent Fraud' Offence: ECCTA introduces a new corporate offence, holding large organizations liable if they fail to prevent their associates from committing fraud. To avoid substantial fines, organisations must establish robust fraud prevention measures tailored to their operations.
Regulation of Crypto-assets: The Act grants enhanced powers to law enforcement agencies to seize and recover crypto-assets involved in criminal activities. This provision recognises the increasing role of crypto-currencies in economic crimes and aims to prevent their misuse for illicit gains.
Measures Against Strategic Lawsuits: ECCTA addresses Strategic Lawsuits Against Public Participation (SLAPPs), protecting individuals and organisations from abusive legal actions aimed at suppressing free speech and investigative journalism.
ECCTA addresses evolving global financial challenges by:
To comply with ECCTA, businesses must:
The Economic Crime and Corporate Transparency Act 2023 marks a significant milestone in strengthening the UK's legal framework against economic crime while promoting transparency in corporate governance. Compliance with these new standards is crucial for businesses to navigate regulatory changes successfully and contribute to a resilient and secure financial ecosystem.
Expertise: Intern
Andriy is an international student currently studying for his Bachelor of Arts in European Politics at King’s College London whilst also interning at The Legal Stop. Andriy is multilingual and speaks Slovak, Russian, Ukrainian, English, Spanish, French and Italian. During the internship Andriy will be working closely with experienced professionals and gaining valuable, hands-on work experience.