On 15 March 2022, the Economic Crime (Transparency and Enforcement) Act received royal assent. The rapid passage of the Act through the UK Parliament, after years of delays, came in response to Russia’s invasion of Ukraine in February 2022.

  • While the Act may have disappointed corporate transparency reformers, a number of the Act’s provisions will have a significant impact on those who manage offshore structures and their clients by strengthening individual accountability and increasing exposure to reputational, civil, and criminal litigation risk.
  • The Act has had an immediate impact on the Government’s ability to make urgent sanction designations and we anticipate the reforms will breathe new life into the Unexplained Wealth Order regime. However, the question remains whether, beyond the legislation, the NCA, OFSI, and the UK’s other enforcement authorities have the necessary resources to deliver on the Government’s robust agenda.
  • While flaws have been identified in the Act, particularly in relation to the effectiveness of the Register of Overseas Entities, the Government has assured the House that new legislation is being drafted (and is likely to be before the House in early summer) to address these deficiencies, including comprehensive reform of Companies House.
In this C&G client alert, Tim Harris and Alice Mills examine the effect the relevant provisions of the Act will have on the fiduciary services sector and trustees of overseas entities which own property in the UK.