Economic Crime and Corporate Transparency Act 2023: An overview

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) embodies the culmination of governmental consultations in 2019 and 2020; a White Paper on corporate transparency and register reform in February 2022; and a year of Parliamentary review following the first draft of the ECCTA being published in September 2022.

Drafted in the same spirit as the Economic Crime (Transparency and Enforcement) Act 2022 (see our recent article on this here), the government’s explanatory notes accompanying the ECCTA in its draft form stated its three overarching objectives of, in summary:

• preventing organised criminals and other bad actors from using corporate structures to abuse the UK’s open economy
• strengthening the UK’s response to economic crime
• improving the services delivered by Companies House

This toolkit covers the following key aspects of the ECCTA: 

• Reforms to Companies House: Giving Companies House a more active role in checking, verifying and declining the data submitted to it. Companies House is also given enhanced powers of investigation and enforcement and will be enabled to share data more effectively. The Chief Executive of Companies House has described this element of the ECCTA as “one of the most significant moments for Companies House in our long history”.
• New identity verification regime: Introducing an identity verification regime for new and existing company directors, PSCs and those filing documents with Companies House (including those doing so on behalf of a client).
   
• Changes to company administration: Updates to the information companies need to file at Companies House and the rules on maintaining statutory registers.
   
• Liability for economic crimes: Creating a new corporate offence of failing to prevent fraud, enhancing the existing offence of making a false statement, and extending the identification principle of criminal liability to include senior management. The director of the UK Serious Fraud Office has called the ECCTA “the most significant boost to the SFO’s ability to investigate and prosecute serious economic crime in over 10 years”.
   
• Updates to the Register of Overseas Entities: The ECCTA has made a number of amendments to the Overseas Entities regime introduced last year by the Economic Crime (Transparency and Enforcement) Act 2022.

The ECCTA is an ambitious and wide ranging piece of legislation which will be further supplemented by secondary legislation and guidance that is in the process of being published.

We hope you find this toolkit useful and please do contact Joe.Bedford@stevens-bolton.com or your usual Stevens & Bolton contact to discuss how we can support you in preparing for compliance with the ECCTA. If you would like to explore the company secretarial support we can offer, please contact Cosec@stevens-bolton.com.