The new Economic Crime (Transparency and Enforcement) Act
received Royal Assent in the early hours of this morning (15
March), following an expedited passage through Parliament.
Introduced following Russia’s invasion of Ukraine, the new
legislation will mean the government can move more quickly to
impose sanctions against oligarchs already designated by our
allies, as well as intensifying our sanctions enforcement. The
Foreign Secretary will set out further sanctions made possible by
our new powers later today.
A new Register of Overseas Entities, requiring those behind
foreign companies which own UK property to reveal their
identities, will also be created under the act. Entities who
refuse to reveal their ‘beneficial owner’ will face tough
restrictions on selling the property and those who break the
rules could face a fine of up to £2,500 per day or up to 5 years
in prison. This will be a valuable tool for law enforcement
agencies in investigating suspicious wealth. Companies House will
now begin work to implement the register as quickly as possible,
working closely with the UK’s 3 land registries. Any foreign
company selling properties between 28 February and the full
implementation of the register will also be required to submit
their details at the point of sale.
Reforms to Unexplained Wealth Orders (UWOs) will remove key
barriers to their use, increasing time available to law
enforcement to review material provided in response to a UWO and
protecting them from incurring substantial legal costs if they
act reasonably in a case that is ultimately unsuccessful.
Furthermore, UWOs will be more effective against those who hold
property in the UK via trusts and other complex ownership
structures. The government has also committed to publishing an
annual report on their use.
Home Secretary said:
This government has moved quickly to strengthen our response to
Putin’s cronies and ensure that corrupt elites have nowhere to
hide their dirty money in the UK.
We will continue to work with our international partners to take
the strongest possible action against those who enable this
unprovoked aggression towards Ukraine.
Business Secretary said:
There is absolutely no room for illicit finance in the UK, and by
bringing forward this Economic Crime Act at unprecedented speed
we’ve put Putin, and the corrupt elites propping him up, on
notice.
Our new Register of Overseas Entities, the first of its kind in
the world, will have an immediate dissuasive effect on oligarchs
attempting to hide their ill-gotten gains, ensuring that the UK
is a place for legitimate business only.
Chancellor of the Exchequer, said:
Our Economic Crime Act will enable us to crack down harder and
faster on dirty money and those who support Putin and his regime.
We are using all of our financial might to send a clear message
to the Kremlin that this criminal venture will end in total
failure.
These measures form part of a wider package of legislative
proposals to tackle illicit finance which will be introduced in
Parliament in the coming months, including reforming Companies
House and introducing new powers to seize crypto assets more
easily.
The Prime Minister also announced a new ‘Kleptocracy Cell’ based
in the National Crime Agency, which has been created to target
sanctions evasion and corrupt Russian assets hidden in the UK.
The Home Secretary will attend the inaugural ministerial Russian
Elites Proxies and Oligarchs Task Force on Wednesday. This
meeting will bring together finance and justice and home affairs
ministers from the G7, EU and Australia responsible for the
supervision of sanctions and enforcement work. The task force
aims to ensure the effective implementation of financial
sanctions on Russian elites and oligarchs to further drive
collective efforts to tackle Kremlin-linked illicit finance.
