This week, the government has announced that new legislation will be brought forward to tackle economic crime. We welcome the measures set out in the Economic Crime (Transparency and Enforcement) Bill and the publication of the corporate transparency and register reform white paper.
We’re keen to do all we can to play our part in tackling global economic crime and improving corporate transparency to prevent a wide range of illegality, including illicit finance and money laundering.
Our progress so far
We’ve been clear about our ambition to do more to tackle economic crime and we’ve been actively involved in shaping the government’s plans over the last few years. We published our 2020-25 strategy 18 months ago which clearly sets out our vision to be the most innovative, open and trusted registry in the world, and we’ve always known that we needed legislative reform to help us to achieve this. One of our 6 strategic goals is to ‘combat economic crime through active use of analysis and intelligence’ which demonstrates the strategic importance of this work for Companies House.
We haven’t stood still since the launch of our strategy. We’ve been working hard on delivering our transformation programme, making sure we’ll be ready to move quickly once the legislation is introduced. This work has included quickly delivering digital solutions to support customers during the COVID-19 pandemic, transforming our systems and services to improve existing customer journeys, and scoping technological solutions for current and future challenges. Thanks to our brilliant people, we’re in a positive position as we approach the next milestone.
We’ve vastly improved our relationship with law enforcement partners over the last few years and we already provide valuable intelligence for wide-ranging criminal investigations. However, up until now, we haven’t had the tools to go further and to prevent the misuse of corporate entities. We’ve been very keen to play a greater role and to go that step further, and these large-scale reforms will give us the powers to do that.
Register of Overseas Entities
We know that the new Register of Overseas Entities is an immediate priority, and we’re working at pace to make sure this is implemented as soon as possible after Royal Assent. The Register of Overseas Entities will apply retrospectively to property bought by overseas owners up to 20 years ago in England and Wales and since December 2014 in Scotland. The new register will be held by Companies House, with support from the UK’s Land Registries.
The Register of Overseas Entities will be at the heart of a new global standard for transparency and will greatly contribute to improved transparency of ownership. Entities who do not declare their ‘beneficial owner’ will face restrictions over selling their property, and those who break the rules could face up to 5 years in prison. The new register will support a new whole-system approach to tackling economic crime and we’re proud to be at the forefront of this landmark change.
Wider reforms of Companies House
We’re also making sure that the wider reforms of Companies House included within a further Economic Crime Bill are at the front and centre of our transformation programme. These new measures will enable us to play a much broader role in tackling economic crime and improving corporate transparency. They include:
- anyone setting up, running, owning or controlling a company in the UK will need to verify their identity with Companies House
- Companies House will be given the power to challenge suspicious information, and to inform security agencies of potential wrongdoing
- company agents from overseas will no longer be able to create companies in the UK on behalf of foreign criminals
- the quality of information provided to Companies House will be improved, so that companies who rely on it to make business decisions can trust who they are doing business with
- filing processes for small businesses will be streamlined and digitised
- company directors will be better able to protect personal information published by Companies House which might put them at risk of fraud or other harm
All these measures combined will ensure that the UK continues to be a great place to do business, while taking a tough stance against economic crime and the misuse of corporate entities. We believe these wide-ranging reforms will enable us to play a leading role in achieving this ambition.
We’re ready to implement the biggest transformation to Companies House since 1844, and to play our part in tackling economic crime and driving confidence in the UK economy.
17 comments
Comment by Ken Care posted on
Long overdue.
Comment by Helena Caroukis posted on
Although I am not a UK subject, I feel very strongly for your country, because I have spent ten glorious years in London as a student at the LSE and later working for an investment bank. You are doing an excellent job. Financial transparency is a key ingredient to fight illicit financing. Well done.
Comment by Patrick Cogswell posted on
We need to catch the crooks now, not in nine months time. What can Companies House do to implement registration now without full legal force?
Comment by SteveH posted on
Do you really need new law to verify identity? Can't you find a way now?
Comment by Jodie John - Digital Content Designer posted on
Thanks for your question.
Identity verification is one strand of legislative change we’re introducing as part of the register reform package of measures.
The legislation will provide a clear mandate to implement processes that will increase transparency on who is setting up, managing and controlling companies. This means we can effectively and robustly meet our commitment to tackling economic crime and enhancing the integrity of information on the Companies House register.
Comment by SteveH posted on
yadda yadda yadda
WHY NOT DO IT NOW?
Comment by Jodie John - Digital Content Designer posted on
Hi Steve,
Identity verification is a new mechanism that Companies House will be implementing as part of our measures to reform the Companies Register. There is no existing legal framework in place to enable us to introduce or enforce this strand of reform immediately.
We are developing new legislation to make sure we can introduce a system and enforce these requirements that meet our organisational aims of reducing economic crime and enhancing register integrity. The timelines for introduction of identity verification not confirmed but we hope to be able to provide further information for people in the future.
Comment by SteveH posted on
Every financial institution in UK and beyond has been doing this for years and years.
They mainly sub it out to a credit agency. It would take a week to get it going
AND where in the law does it say you must not verify identity?
Comment by Charles Smith posted on
Is it intended to introduce prescribed forms to give effect to the Economic Crime (Transparency and Enforcement) Act 2022
Comment by Jodie John - Digital Content Designer posted on
Hi Charles, thank you for your question.
We expect the Registration of Overseas Entities service to be digital but there may be some paper filings. If there are, we'll prescribe forms.
Comment by zone supplies posted on
This message is exhaustively informative.
Comment by Jules posted on
Companies House lack of any validation processes has meant that its a fraudsters paradise to set up bogus firms and con innocent people out of money and assets for many years. This was known 20 years ago and you've had years to resolve this issue. You don't need 'legislative change' to report any kind of false declaration in the public domain, that's absolute rubbish, you could report suspicious behaviour if you chose to via the diverse number of means including anonymous reporting. You are just lazy and have constantly side-stepped your responsibilities. Wikipedia has stronger security than you do. High time that change was imposed on this out of date and out of touch government agency.
Comment by Jodie John - Digital Content Designer posted on
Thanks for your comment.
The legislation will provide a clear mandate to implement processes that will increase transparency on who is setting up, managing and controlling companies. This means we can effectively and robustly meet our commitment to tackling economic crime and enhancing the integrity of information on the Companies House register.
Comment by Clara posted on
When can we expect the implementing legislation of Companies House reforms to be published?
Comment by Jodie John - Digital Content Designer posted on
Thank you for your comment.
We are developing new legislation to make sure we can introduce a system and enforce these requirements that meet our organisational aims of reducing economic crime and enhancing register integrity. The timelines for introduction of identity verification not confirmed but we hope to be able to provide further information in the future.
Comment by Pat Moorhouse posted on
Aggregation of the Beneficial Owners of property also needs to be combined with bigdata to track actual resident (council tax, dvla and banking) to regulate hidden landlords and track rental income from property portfolios - otherwise is just a list without a meaningful purpose.
Will reciprocal arrangements allow cross linking to similar registers to identify UK owners holding undisclosed foreign assets (and incomes) also?
Comment by Ellis Davies - Digital Content Manager posted on
Hi Pat, thanks for your comment.
The government will continue to discuss with our international partners how to best identify undisclosed overseas assets, to aide transparency. The government will also, later this year, bring forward a second Economic Crime Bill which will reform the register of companies and enhance the accuracy and transparency of the information that Companies House holds.