Economic Crime Act 2023

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) marks a significant overhaul of the legal framework in England and Wales aimed at tackling economic crime and enhancing corporate transparency. In this article, Economic Crime Act 2023, we take a look at the process and mechanism involved.

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Strengthening the Fight Against Economic Crime

The ECCTA builds upon previous legislation like the Economic Crime (Transparency and Enforcement) Act 2022, further tightening the grip on financial crime and promoting a more transparent business environment. Here are some of the key areas addressed by the ECCTA:

• Register of Overseas Entities (ROE): Expanding on the ROE introduced in 2022, the ECCTA strengthens its enforcement mechanisms. This includes imposing fines and restrictions on dealing with UK property for non-compliant overseas entities.
• Unexplained Wealth Orders (UWOs): The ECCTA streamlines the process for obtaining UWOs, a powerful tool allowing authorities to investigate the source of wealth used to acquire property in the UK.
• Corporate Failure to Prevent Economic Crime: The ECCTA introduces a new offence – failure to prevent economic crime by a relevant person associated with a company. This places a significant burden on businesses to implement robust anti-money laundering (AML) and counter-terrorist financing (CTF) measures.

Failure to Prevent Economic Crime: A Game Changer

The introduction of the “failure to prevent” offence is a major change for businesses. Here’s what it entails:

• Relevant Person: The offence can be committed by any person who has a “senior position” within the company, including directors, senior managers, and those making key decisions on behalf of the company.
• Types of Economic Crime: The specific offences the duty applies to haven’t been fully defined yet, but are likely to include fraud, bribery, false accounting, and money laundering.
• Defence for Businesses: Companies can defend themselves by demonstrating they had adequate procedures in place to prevent economic crime. This could include:

– Implementing a risk-based AML/CTF compliance programme.

– Conducting regular due diligence on customers and business partners.

– Providing training for employees on financial crime risks and red flags.

Enhanced Unexplained Wealth Orders

UWOs allow authorities to freeze and potentially seize assets suspected to be the proceeds of crime. The ECCTA streamlines the process for obtaining UWOs by lowering the civil standard of proof required and enabling the use of evidence gathered through compelled disclosure. This makes it easier for authorities to investigate suspicious wealth used to acquire UK property.

Increased Powers for Companies House

Companies House, the UK registrar of companies, is given greater powers under the ECCTA to:

• Challenge and Reject Information: Companies House can now reject information submitted for company registration if it is believed to be inaccurate, incomplete, or fraudulent.
• Conduct Stronger Name Checks: The ECCTA empowers Companies House to conduct stricter checks on company names to prevent misleading or offensive names.

These enhanced powers aim to improve the accuracy and integrity of the UK company register.

Implications for Businesses

The ECCTA has significant implications for businesses operating in England and Wales. Here’s what you need to consider:

• Reviewing AML/CTF Procedures: Assess your existing AML/CTF procedures and ensure they are robust enough to meet the “failure to prevent” requirements.
• Training and Awareness: Provide training for employees on financial crime risks and red flags associated with your industry.
• Enhanced Due Diligence: Implement enhanced due diligence measures for customers, suppliers, and other business partners.
• Effective Risk Management: Develop a comprehensive risk management framework to identify and mitigate financial crime risks specific to your business.
• Seeking Legal Advice: Blackstone Solicitors can advise you on the legal implications of the ECCTA and help you develop a compliant approach to economic crime prevention.

Conclusion

The ECCTA signifies a new era of heightened responsibility for businesses in tackling economic crime. By staying informed, implementing robust compliance measures, and seeking legal guidance, businesses can navigate this evolving landscape effectively and protect themselves from potential legal and reputational risks. Blackstone Solicitors can be your trusted partner in ensuring your business adheres to the highest standards of corporate transparency and financial crime prevention.

How we can help

We have a proven track record of helping clients navigate the economic crime act 2023. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.

How to Contact Our Corporate Solicitors

It is important for you to be well informed about the issues and possible implications of the economic crime act 2023. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.

To speak to our Corporate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Authored by Ben Posted in Blog, News Tagged as

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