New UK Legislation: The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 3) Regulations 2024
Date: 2024-11-06 10:54
Significance:
The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 3) Regulations 2024 represent the latest phase in the implementation of significant new legislation aimed at combating economic crime and enhancing corporate transparency in the United Kingdom.
Key Provisions:
The Regulations bring into force the following provisions of the Economic Crime and Corporate Transparency Act 2023 (the Act):
- Section 21 (Register of Overseas Entities): Requires overseas entities that own or lease land in the UK to register on a public register. This aims to prevent foreign criminals from using UK property to launder money or hide assets.
- Sections 39-42 (Trust Registration Service): Expands the Trust Registration Service to include all express trusts (except “excluded trusts”). Trustees will need to register the beneficial owners of the trust, their nationality, and their country of residence.
- Sections 126-128 (Company Officers’ Duties in Relation to Economic Crime): Introduces new duties for company directors and other senior officers to prevent their companies from becoming involved in economic crime.
- Sections 129-132 (Enhanced Due Diligence on Customers and Clients): Requires businesses to conduct enhanced due diligence on customers and clients who are politically exposed persons (PEPs) or high-risk individuals.
Implementation Timeline:
The Regulations will come into force on the following dates:
- Section 21: 31st January 2025
- Sections 39-42: 1st February 2025
- Sections 126-128: 30th April 2025
- Sections 129-132: A date to be determined
Impact on Businesses and Individuals:
The Act and these Regulations will have significant implications for businesses and individuals involved in the following:
- Real estate: Overseas entities will be required to register their beneficial owners and other relevant information on the Register of Overseas Entities.
- Trusts: Trustees will need to register express trusts (except excluded trusts) with the Trust Registration Service and provide information about the beneficial owners.
- Corporate governance: Company directors and other senior officers will have new duties to prevent their companies from engaging in economic crime.
- Financial services: Businesses providing financial services will need to enhance their due diligence procedures for PEPs and high-risk individuals.
Penalties for Non-Compliance:
Failure to comply with the provisions of the Act and these Regulations can result in significant penalties, including fines, imprisonment, and disqualification from being a company director.
Conclusion:
The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 3) Regulations 2024 represent a major step forward in the UK’s efforts to tackle economic crime and enhance corporate transparency. Businesses and individuals should familiarize themselves with the provisions of the Act and Regulations and take steps to ensure compliance.
The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 3) Regulations 2024
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