• UK’s Economic Crime and Corporate Transparency Bill passes into law
  • Heralded as a major shakeup of UK approach to economic crime
  • Some have criticised the measures as not going far enough

Major reforms to how the UK polices and prevents fraud and corruption became law on Thursday, under sweeping new measures designed to tackle economic crime.

The Economic Crime and Corporate Transparency Bill received Royal Assent after a long debate in the House of Lords and the House of Commons, and following a battle over amendments added by the Lords (which were eventually dropped).

The UK government, and Home Secretary Suella Braverman, claim that the new law will strengthen the hands of prosecutors and help them tackle the flow of dirty money.

Others have said the measures fall short of what’s needed to tackle the UK’s burgeoning financial crime problem and that the measures lack enough new resources to make them stick.

Our Head of Advocacy, Charles Bott KC, had previously welcomed House of Lords amendments added to the Economic Crime and Corporate Transparency Bill.

He called them “useful and sensible amendments which strengthen the bill” – notably measures to ensure small and medium-sized business would also be covered under the new failure to prevent fraud measure (now dropped).

Some key provisions of the new Act include:

◾ a new criminal offence of “Failure to Prevent Fraud”
◾ long-promised Companies House reform
◾ reforms to prevent the abuse of limited partnerships
◾ changes to the identification doctrine
◾ powers to seize and recover suspected cryptoassets
◾ reforms to improve information sharing
◾ new intelligence gathering powers for law enforcement

Responding to the new Act, MKS Head of Investigations, Tony McClements, said:

“Like most professionals in the counter-fraud and anti-corruption field, I welcome the new Economic Crime and Corporate Transparency Act.

“However, at the risk of sounding underwhelmed, as a former fraud squad detective I am eager to see how the legislation will be utilised by law enforcement whose focus and priorities appear to lie elsewhere – hence the UK’s appalling record in bringing fraudsters to justice.

“In particular, I welcome the effort to overhaul Companies House. UK politicians have forever waved the Companies House public register as being the answer to the clamour for global transparency in relation to ultimate beneficial ownership.

“Indeed, you will often see foreign states using the UK’s register as the gold standard for those advocating open public access to UBO data, oblivious to the fact the information was mostly unverified and effectively worthless in the context of investigation.

“Thus the move to rectify the weaknesses in the Companies House gatekeeping role, making it an effective hurdle to those who would abuse the service, is long overdue.

“As stated, drafting legislation to close loopholes in order to frustrate fraudsters and the corrupt is admirable, but without the human resources and infrastructure to implement it, the value of the legislation is immediately undermined.”

Read more about the new Act:

Government announcement: https://www.gov.uk/government/news/robust-new-laws-to-fight-corruption-money-laundering-and-fraud

Details of the Act: https://www.gov.uk/government/collections/economic-crime-and-corporate-transparency-bill-2022