A robust law to reinforce the UK's commitment to combat fraud, economic crime and corruption.
The Economic Crime and Corporate Transparency Act has now become law.
It largely focuses on:
- introducing a new failure to prevent fraud offence;
- reforming corporate criminal liability laws to hold corporations liable in their own right for economic crime;
- changing the way in which UK companies and LLPs must manage themselves;
- modernising the law governing limited partnerships (including Scottish limited partnerships); and
- giving Companies House much greater powers to query and reject information submitted and cross reference and share information more widely with other government/public bodies to identify discrepancies and economic crime.
As we have reported over the past few months, when these measures will be implemented is not clear. Much will depend on the speed with which Companies House can implement processes to support the changes coming through. Companies House have themselves confirmed that "Some of the measures in the act, such as identity verification, will not be introduced straight away. Many of these changes need system development and secondary legislation before they're introduced. However, other measures will come into force sooner". They have set out a list of early measures here which they anticipate coming into force in early 2024.
Back in February we published this overview of the key planned Companies House reforms. As the Bill has bounced between the House of Lords and House of Commons over the past few months, there have been various proposed amendments – some of which have been accepted. Please watch this space for our updated guidance.
With reference to the new criminal offences contained within the Act we still await the publication of detailed enforcement guidance which will include how any of these allegations will be investigated and what factors will inform the allocation of investigatory resource and any decision to prosecute. In addition, guidance is yet to be published about how the SRA will use their new powers to investigate and sanction legal professionals in respect of alleged breaches of this legislation where the firm's or individual lawyer's alleged misconduct could be considered an act or omission which had the effect of inhibiting the prevention or detection of economic crime.
We have also published the following insights on the new failure to prevent fraud offence and extension of the identification principle for economic crime offences – and will publish more on these topics as things develop.
- Economic Crime and Corporate Transparency Bill - where are we now? - TLT LLP
- Economic Crime and Corporate Transparency Bill - TLT LLP
- Employers' new criminal liability for fraud - TLT LLP
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.