Shoosmiths LLP
  May 24, 2023 - Milton Keynes, England

Register of Overseas Entities: When will fines be imposed?
  by Shoosmiths LLP

In March 2022, the Economic Crime (Transparency and Enforcement) Act (“ECA”) was enacted and with it came the creation of a Register of Overseas Entities.

Enforceable since January 2023, the register, which includes information about beneficial owners of property or land, attracts a financial penalty of up to £2,500 a day for those that did not submit information before the deadline of 31 January 2023.

On analysis last year, we highlighted a number of weaknesses in the legislation and determined that further reforms would be necessary. The BBC has now revealed that the UK government has so far failed to impose fines worth £1bn on foreign companies in breach of the new transparency laws.

According to Transparency International, a snapshot of the register in February 2023 showed that 52,000 UK properties are still owned anonymously, with companies having either ignored the law altogether or submitted information, which makes it impossible to find out who owns them. This is a current loophole in the legislation, allowing companies that file information to say that they have no beneficial owner, soon to be plugged by the Economic Crime and Corporate Transparency Bill.

The BBC article states that: Although no financial penalties have been issued, a spokesperson for the Department for Business and Trade said it was building cases against companies who have failed to register by the deadline and working with law enforcement to "prioritise action against the most egregious offenders".

With tackling financial crime high on the government's agenda, the business crime team at Shoosmiths is providing training to keep firms compliant and up to date on the most recent changes to the law. This follows experience advising on some of the largest and most complex criminal fraud cases.

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