Introduced as the result of the invasion of Ukraine by Russia, the Economic Crime (Transparency and Enforcement Act 2020 (‘the Act’) enables Government to expeditiously impose sanctions against targeted oligarchs whilst also intensifying sanctions enforcement.

Tim Thompson of Kangs Solicitors briefly discusses this topic.

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Operation of the Act | Kangs Unexplained Wealth Order Solicitors

The main aim of the Act is to target individuals identified as in possession of substantial funds believed to represent the proceeds of crime, to freeze assets and to prevent the laundering of such funds through the following.

A Register of Overseas Entities

  • Individuals controlling foreign companies which own UK property are now required to declare their identities which will be recorded in a Register to be maintained at Companies House.
  • Entities refusing to reveal the ‘beneficial owner’ will face tough restrictions on selling the property. Until such time as the required details have been entered on the Register, the Land Registry will not register title to ownership.    
  • A foreign company attempting to sell property after 28 February 2022 and prior to the full implementation of the Register will also be required to submit all requisite information details at the point of sale.
  • The Register will operate retrospectively with the effect that any overseas entity that has purchased UK property within the last twenty years must apply to register within six months.  

Sanctions for Breach

A breach of the Act could result in a fine of up to two thousand pounds for each day of no compliance or five years in prison.

Unexplained Wealth Orders

  • It is anticipated that the Act will assist law enforcement agencies investigate suspicious wealth.
  • Reforms to Unexplained Wealth Orders (‘UWOs’) will remove restrictions on their use, increasing time available to law enforcement to review material provided in response to a UWO.
  • UWOs will be more effective in respect of property held in the UK via trusts and complex ownership structures designed to disguise true ownership.

For more information on Unexplained Wealth Orders please click here.

Official Comment | Kangs Economic Crime Act Solicitors

Home Secretary Priti Patel said:

‘This government has moved quickly to strengthen our response to Putin’s cronies and ensure that corrupt elites have nowhere to hide their dirty money in the UK.

We will continue to work with our international partners to take the strongest possible action against those who enable this unprovoked aggression towards Ukraine.’

Business Secretary Kwasi Kwarteng said:

‘There is absolutely no room for illicit finance in the UK, and by bringing forward this Economic Crime Act at unprecedented speed we’ve put Putin, and the corrupt elites propping him up, on notice.

Our new Register of Overseas Entities, the first of its kind in the world, will have an immediate dissuasive effect on oligarchs attempting to hide their ill-gotten gains, ensuring that the UK is a place for legitimate business only.’

Chancellor of the Exchequer, Rishi Sunak said:

‘Our Economic Crime Act will enable us to crack down harder and faster on dirty money and those who support Putin and his regime.

We are using all of our financial might to send a clear message to the Kremlin that this criminal venture will end in total failure.

These measures form part of a wider package of legislative proposals to tackle illicit finance which will be introduced in Parliament in the coming months, including reforming Companies House and introducing new powers to seize crypto assets more easily.’

How Can We Assist? | Kangs International Fraud & Corruption Offences Defence Lawyers

If you are, or anticipate, being subjected to any investigation relating to allegations of corrupt or financial misconduct activity of any nature, please do not hesitate to contact us.

Kangs civil and criminal litigation teams have extensive expertise defending investigations and prosecutions pursued by investigative agencies of all types.

We welcome enquiries by telephone or email.

We provide an initial no obligation consultation from our offices in London, Birmingham and Manchester.

Alternatively, we provide initial consultations by telephone or video conferencing.

Contact:

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258171 | 020 7936 6396 | 0121 449 9888

Tim Thompson
tthompson@kangssolicitors.co.uk
0161 817 5020 | 020 7936 6396 

John Veale
jveale@kangssolicitors.co.uk
0121 449 9888 | 020 7936 6396 | 07989 521 210