Economic Crime (Transparency and Enforcement) Bill

On 9 March 2022, the second reading of the Economic Crime (Transparency and Enforcement) Bill is scheduled to take place in the House of Lords.

The Economic Crime (Transparency and Enforcement) Bill is being fast-tracked through its stages in Parliament. It completed its second reading and remaining stages in the House of Commons on 7 March 2022.

The bill’s explanatory notes state that the bill is being fast-tracked “in consequence of recent events in Ukraine”. The bill would make changes in three areas:

• Part 1 would introduce a register of the beneficial owners of overseas entities that owned land in the UK.
• Part 2 would make changes to strengthen unexplained wealth orders.
• Part 3 would make changes to sanctions legislation to help deter and prevent breaches of financial sanctions

Legislation on establishing a register of overseas entities was subject to pre-legislative scrutiny in 2019 by the Joint Committee on the Draft Registration of Overseas Entities Bill. The Government’s human rights memorandum states that “an amended version” of the draft Register of Overseas Entities Bill forms part 1 of the Economic Crime (Transparency and Enforcement) Bill.

The Government made several amendments to the bill during its committee stage in the House of Commons, including reducing the transitional period for certain overseas entities registering as an overseas entity from 18 months to 6 months and increasing fines for certain offences under the bill. It also added a new chapter 2 in part 3 of the bill on sanctions. 

The bill has cross-party support, although concerns were raised in the House of Commons around enforcement, including preventing ‘asset flight’ and on reducing the bill’s transitional period further. Three non-government amendments were defeated on division at committee. These were on: reporting on the funding for enforcement agencies; publication of draft legislation on reforms to Companies House; and asset freezing in respect of individuals considered for sanctions.

The Government has said that it will look at a number of the concerns raised in the Commons during the bill’s passage through the House of Lords.