Author: Nicola Sharp 11 August 2022
Nicola Sharp of financial crime specialists Rahman Ravelli details its main points.
A new register that aims to prevent UK property being used to launder illegal wealth has come into force.
The register was one of the measures included in the Economic Crime (Transparency and Enforcement) Act, which was passed earlier this year in response to Russia's invasion of Ukraine.
Any anonymous foreign company that seeks to buy land or property in the UK will now have to disclose the true owners for the register. A refusal to do this can lead to fines of up to £2,500 per day or up to five years in prison.
The register is part of attempts to stop the flow of “dirty money’’ into the UK. It applies to property bought since January 1999 in England and Wales, and since December 2014 in Scotland.
Foreign organisations that already own land in the UK will have six months to register their beneficial owners or managing officers. Any overseas body that has disposed of property since 28 February 2022 - when the legislation for the register was first announced - will have to provide a statement to Companies House.
Business Minister Lord Callanan said: "By getting this first of its kind register up and running at breakneck speed, we are lifting the curtain and cracking down on those criminals attempting to hide their illicitly-obtained wealth."
The requirements that are being placed on overseas organisations to provide details of the land and property they have in the UK are a clear attempt to address a problem that has been recognised for many years.
The thinking behind the register is understandable. But it will be interesting to see how the authorities and Companies House go about ensuring that its requirements are met – and how frequently enforcement action is taken against those who fail to do so. It also remains to be seen whether the new measures may restrict the ability to sell properties in certain situations.
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.