03/01/24

Economic Crime and Corporate Transparency Act 2023 | KANGS Financial Fraud Defence Solicitors

Share

The Economic Crime and Corporate Transparency Act 2023 (‘the Act’), introduces a number of new offences, enforcement and investigative powers to law enforcement agencies in respect of economic crime.

Hamraj Kang of KANGS outlines some of the key provisions featured in the Act including the newly established criminal offences and investigative powers.

The Team at KANGS has vast experience and is highly regarded nationwide for assisting clients facing investigations in respect of economic crime.

Our Team is led by Hamraj Kang, recognised as a leading expert in the field of financial crime, ranked in the ‘Top Tier’ of criminal solicitors, winner of The Legal 500 ‘Criminal, Fraud and Licensing Solicitor of the Year’ and one of only two solicitors in England and Wales ranked as a ‘Star Individual’ for eight consecutive years in the Chambers UK Directory for work in the field of financial crime and fraud.

Should you require any initial advice, our Team can be contacted as follows:

Key Provisions | KANGS Economic Crime Defence Solicitors

Introduction

The Act has been introduced in recognition of increasing economic criminal activity using the British economic and financial system as a means, inter alia, by which to hold and launder money arising from criminal activity and to update existing legislation to cater for the requirements of current society and the digital age.

The Act covers the following key areas:

  • Increased investigative powers.
  • The submission of false statements by companies, overseas entities and partnerships.
  • Cryptocurrency.
  • The new offence of failure to prevent fraud.

Investigative powers

Increased investigative powers have been created for a several agencies, including those of the Serious Fraud Office (SFO), one of the UK’s leading law enforcement agencies, which has received an increase in powers to force disclosure of evidence and witness statements at the ‘Pre-Investigative Stage’ to cover all categories of investigation.

Previously, under s.2 of the Criminal Justice Act 1987 (CJA 1987), disclosure of evidence and witness statements at this stage could only be enforced in relation to cases of international bribery and corruption.

Other examples of increased investigative powers include:

  • HMRC Increased powers to force company accounts disclosure (s.128)
  • Seizure of crypto assets in order to investigate criminal offences.
  • Amendments to the Terrorism Act 2000 to expand seizure powers in respect of crypto assets.

Cryptocurrency

The National Crime Agency is now authorised to seize and freeze crypto assets, which have been increasingly used to launder profits from serious crime.

Such powers were, generally, previously reserved in respect of individual and company bank accounts being investigated under the Proceeds of Crime Act 2002 but the Act extends many of those provisions to dealings in cryptocurrency.

Pursuant to Schedule 8, 9 and 10 of the Act, a number of new provisions have been added to the Proceeds of Crime Act 2002. These include but are not limited to powers of:

False statements

The Act introduces new offences covering the submission by companies, partnerships and overseas entities of false statements to Companies House.

Failure to prevent fraud

The Act introduces a number of new offences in relation to economic crime, most notably at in relation to corporate crime.

One offence of note is the new criminal offence of a failure to prevent fraud offences.

This offence is developed from the Bribery Act 2010 and is similar to the existing 'failure to prevent' offences for bribery and tax evasion.

The new offence targets ‘large organisations’ that fail to establish controls to prevent dishonest sale tactics, false accounting and market manipulation.

The 'failure to prevent' formulation is less onerous for the prosecution as it does not need to identify any dishonest behaviour from a ‘directing mind’.

Whilst organisations do not need to have known about the wrongdoing to be held criminally liable, a defence is available where 'reasonable' fraud prevention procedures can be seen to be in place.

A ‘large organisation’ is one which meets two of three criteria:

  • has 250 employees,
  • enjoys sales exceeding £36m,
  • owns at least £18m in assets.

How Can We Help? | KANGS National Criminal Defence Solicitors

The Act clearly substantially extends the powers of law enforcement agencies to the extent that it will take time to fully understand their effects.

Accordingly, should you receive any form of Notice indicating a Request for Disclosure, the commencement of criminal proceedings, investigation or anything similar you should seek immediate professional assistance.

The Team at KANGS provides vast experience gained from assisting clients over many years faced with allegations relating to economic crime and would be pleased to assist you.

We welcome enquiries by:

Telephone: 0330 370 4333

Email: info@kangssolicitors.co.uk

We provide a no obligation, initial consultation at our three offices in Manchester, Birmingham and London. Alternatively, meetings can be held via video conferencing.

Financial Investigations, Tax & HMRC
In previous articles Money Laundering Regulations |Customer Due Diligence and MLR | Due Diligence, we outlined the manner in which The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, (‘the Regulations’) imposed strict duties on various businesses to implement and supervise anti-money laundering measures and also the identification and […]
21/02/24
POCA
When deemed necessary to preserve a suspect’s assets, by preventing them from being sold or otherwise dissipated, a Restraint Order may be obtained from the Court prior to criminal proceedings which may lead to conviction and, subsequently, the making of a Confiscation Order under the Proceeds of Crime Act 2002 (‘POCA’). Having obtained a Restraint […]
07/02/24
Account Freezing Order, POCA
KANGS has successfully represented a client against whom HMRC were seeking an Account Freezing Order alleging that considerable funds held in her bank account derived from criminal conduct. Tim Thompson of KANGS Solicitors reports on this successful outcome. KANGS has been representing clients facing investigation and proceedings commenced by HMRC, in both criminal and civil […]
06/02/24

Get in touch