The aim of this Act is to strengthen the UK’s fight against economic crime while enhancing corporate transparency in the UK. The Act received Royal Assent on 26 October 2023, but is pending sanction guidelines before it becomes law.

Companies House Reform- Key Points
  • Identity verification for proposed directors and enhanced scrutiny of persons with significant control.
  • Broadening the powers of the Registrar so that they can become a more active gatekeeper and check, remove or decline information submitted to or already on the companies register.
  • Providing Companies House with more effective investigation and enforcement powers and introducing cross-checking of data with other public and private sector bodies.
  • Broader reforms to clamp down on the misuse of corporate entities.
Failure to Prevent Fraud Offence

A new offence that holds companies and organisations accountable for failing to prevent economic crimes committed by their employees or agents. It aims to drive a culture shift towards better fraud prevention in organisations.

Focuses on situations where a company’s failure to implement anti-fraud measures results in criminal activity within the organisation.
Companies can be prosecuted if they fail to take reasonable steps to prevent fraud, money laundering or other economic crimes.

Offences typically involve bribery, corruption, tax evasion or fraudulent financial activities.

In order to prevent prosecution under the Act the organisation must be able to demonstrate that it has adequate measures in place to prevent fraud.

Failure to Prevent Money Laundering

An organisation is liable if an employee or agent commits money laundering for the organisation’s benefit. It does not need to be proven that the organisation knew that money was being laundered through its accounts.

An organisation must have reasonable anti-money laundering (AML) procedures in place.

The Act will strengthen anti-money laundering powers and enable better information sharing.

Cryptoassets

The Act will provide additional powers to law enforcement so that they are able to more easily seize and recover cryptoassets which are the proceeds of crime.

For More Information:

Economic Crime and Corporate Transparency Act 2023: Factsheets – GOV.UK (www.gov.uk)

Action Required

Audit Committees and Boards to note the key points and requirements of the Act, and obtain assurance from Executives about the organisation’s arrangements to prevent fraud in preparation for the Act.

The Anti-Crime team at TIAA can provide advice and support to organisations seeking to ensure compliance.