Legislation to tackle "dirty money" hidden in the UK received royal assent on 14 March 2022 after months of delay.
The Economic Crime Bill aims to make it more difficult for individuals from overseas to hide wealth from illicit sources in the UK.
Such a bill has been under discussion since 2016 and was put before the Parliamentary Business and Legislation Committee in January 2022.
However, Government insiders said the committee decided the bill should be "pushed down the list", according to Financial Times.
The Russian invasion of Ukraine revived efforts, however, as the Government sought a method to sanction Russia.
What does the Economic Crime Bill do?
The Economic Crime Bill, formally known as the Transparency and Enforcement Bill, has 55 clauses, divided into three main measures.
Part one would establish a public register of beneficial owners of non-UK entities that own or buy land in the UK, operated by Companies House.
Any overseas entity wanting to own UK land would need to identify their beneficial owners and register them, beneficial owners being those who ultimately own or control an asset.
A beneficial owner would generally only need to be registered if they hold more than 25% of the shares or voting rights in an entity, can appoint a majority of the directors or have some other "significant influence" over it.
Failure to register or submitting false information would be a criminal offence that would prevent the entity from being able to buy, sell or mortgage UK property in the future.
Companies have six months to register, after which point they could face daily fines of up to £2,500.
Part two of the Bill strengthens the unexplained wealth orders (UWO) by expanding who can receive one to "responsible officers" and creating a new test for granting one.
It will grant enforcement authorities to apply for an interim freezing order, which would prohibit the person receiving the UWO from selling it.
Lastly, part three amends existing legislation on UK monetary policies and imposition of sanctions.
The measures apply across the UK.
Will the Economic Crime Act achieve what it sets out to?
Campaigning against corruption since 1993, the UK wing of Transparency International said it welcomed the "ground-breaking legislation".
It said:
"For too long, oligarchs and kleptocrats have used UK property as a bolthole for their ill-gotten gains, yet these reforms should now mean they have nowhere to hide".
Before the Economic Crime Bill was published in full, it said it was positive that a property cannot be sold unless its proprietor has submitted its beneficial ownership information.
Transparency International UK also said that the definition of who constitutes a beneficial owner is the same as the existing requirement for UK companies, "which is a broadly sufficient definition".
However, commenting on the unamended version on 7 March 2022, the Chartered Institute of Taxation made a similar critique:
"If [the Government wants to] reveal the real identities of foreigners who own UK property, we do not believe that the Bill will achieve this.
"This is because the legislation does not require the disclosure of the ultimate beneficial owner of the property, but rather the disclosure of the beneficial owner of the overseas entity which in turn owns the property."
As the legislation reads after royal assent, the legislation requires the disclosure of the beneficial owner of an overseas entity with land or property in the UK.
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