The Financial Crime and Business Transparency Act will bolster the UK’s reputation as a place where legitimate businesses can thrive while driving dirty money out of the UK. The reforms require anyone registering a company in the UK to verify their identity to combat the use of companies as fronts for crime or foreign kleptocrats.
The reforms to Companies House – its biggest modernization in 170 years – will also give the organization new powers to review, challenge and reject false or fraudulent information, making it a more active gatekeeper in the formation of companies. Companies House’s investigative and enforcement powers will also be expanded, allowing the organization to cross-check data with public and private partners and report suspicious activity to security and law enforcement agencies.
The bill will also help prevent the abuse of limited partnerships – including those registered in Scotland – for money laundering and other nefarious purposes by tightening registration and transparency requirements for these companies.
Law-abiding businesses and investors across the UK will benefit from simplified registration requirements and a more reliable business register to make business and credit decisions. The reforms will ensure that small business owners, consumers and the public are better protected against fraudulent use of their identities and addresses.
Business Secretary Jacob Rees-Mogg said:
We want the UK to be the best place in the world to invest and set up a business, but we must not allow that openness to be exploited by scammers misusing the identities of innocent people, or by corrupt elites trying to to cover up their shady dealings.
This historic law will equip Companies House and law enforcement with the tools they need to track down criminals trying to cover up their activities without burdening law-abiding companies with unnecessary red tape. Most importantly, through strong enforcement, we tell investors that the UK is only open for legitimate business.
Home Secretary Suella Braverman said:
Britain is not a home for dirty money. The government has taken unprecedented measures to prevent kleptocrats and organized criminals from abusing our open economy, and this bill will go further.
Through this law, we are giving our law enforcement agencies more powers and intelligence capabilities to stay ahead of criminals intent on keeping their corrupt assets out of reach.
Security Minister Tom Tugendhat said:
As former Chairman of the Committee on Foreign Affairs, I commended the government for the swift legislative action it took on dirty money following the invasion of Ukraine, but I implored it to go further.
I am pleased that today we are introducing reforms that will make it much harder for kleptocrats to shield their ill-gotten gains and treat the UK as their safe-deposit box. As Secretary of Security, I am committed to passing this important law to step up our fight against white-collar crime.
Law enforcement will also benefit from greater powers to compel companies to provide information that could be linked to money laundering or terrorist financing. The bureaucracy related to confidentiality liability will be relaxed to allow companies to share information to be more proactive in preventing and detecting white-collar crime, including fraud and evasion of sanctions.
The new law will make it easier and faster for law enforcement agencies like the National Crime Agency to seize, freeze and recover cryptoassets – the digital currency increasingly used by organized criminals to launder profits from fraud, drugs and cybercrime.
The use of this digital currency has grown significantly in recent years, with the Metropolitan Police reporting a sharp rise in cryptocurrency seizures over the past year. Strengthening the Proceeds of Crime Act will modernize legislation to ensure authorities can keep pace with rapid technological change and prevent assets from funding further crime.
The package of measures builds on the previous law on white-collar crime (transparency and enforcement) introduced after Russia’s invasion of Ukraine. The law has made it much quicker to impose harsh sanctions on Putin’s cronies – freezing their British assets and cutting off funds for the Kremlin’s war machine – as well as establishing the recently launched Foreign Entities Registry to root out corrupt oligarchs trying to to hide evildoers. Gains made through British ownership.
National Crime Agency Director-General Graeme Biggar said:
Domestic and international criminals have laundered the proceeds of their crimes and corruption for years by abusing British corporate structures and are increasingly using cryptocurrencies. These reforms – long-awaited and warmly welcomed – will help us tackle both.
Louise Smyth, Chief Executive of Companies House said:
We welcome the measures outlined in this Bill, which represent the most significant and far-reaching changes to the UK business register in over 170 years of history and will enable us to play a much stronger role in making Britain a great place to do business.
If agreed, these changes will allow us to actively improve and maintain the integrity of the registry like never before; inspire more trust in our data, crack down on white-collar crime and further boost confidence in the UK economy.
While the magnitude and scope of these changes should not be underestimated, the work already accomplished through our far-reaching and ongoing transformation program puts us in a strong position to implement them as quickly and efficiently as possible.