UK government institute measures on fraud and money laundering

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money laundering
money laundering

The UK government has announced plans to rolled out reforms to protect the economy from fraud and money laundering.

The Economic Crime and Corporate Transparency Bill aims to “drive dirty money out of the UK,” read a press release by the Home Office. The Bill is currently in Parliament for a second reading that will take place next month.

Organised criminals, terrorists, and kleptocrats will be targeted, by needing to verify their identity before being able to register a company in the UK. The new regulation will require more transparency from businesses forming limited partnerships, and simplify registration processes for reliable businesses to protect small business owners and consumers from falling prey to fraud and money laundering.

On the Bill, Business Secretary Jacob Rees-Mogg stated: “This historic Bill will equip Companies House and law enforcement with the tools they need to root out criminals attempting to hide their activities without burdening law-abiding companies with unnecessary bureaucracy. Above all, via strict enforcement measures, we are telling investors that the UK is open for legitimate business only.”

The law will make it easier for authorities to seize, freeze, and recover digital currencies that are being used by cyber-criminals.

Home secretary Suella Braverman stated: “Through this Bill we are giving our law enforcement agencies greater powers and intelligence capabilities to stay one step ahead of the criminals intent on keeping their corrupt assets out of reach.”

The Bill builds on the Economic Crime Transparency and Enforcement Act that facilitated imposing sanctions on Russian assets in the UK and eliminating corruption from outsider borders in UK property.

Director general of the National Crime Agency, Graeme Biggar concluded: “Domestic and international criminals have for years laundered the proceeds of their crime and corruption by abusing UK company structures, and are increasingly using cryptocurrencies. These reforms – long awaited and much welcomed – will help us crack down on both.”

Commenting on the new regulation, Neil Williams, deputy head of complex crime at Reeds Solicitors LLP noted: “Companies house reforms have been long overdue, and the ECTE act provisions earlier this year were only the start of the process. The changes to the register should theoretically provide transparency to corporate structures and ownership, making it easier for all to see who is really in control and benefitting, but it is only as strong as its weakest link. Enforcement is key, and resources are paramount. The new bill would seem to provide much needed powers to bolster the effectiveness of the reforms, and to properly enforce them.

“There will be concerns over the extent and ease by which information can be shared, as legitimate businesses rightly should expect privacy safeguards, so details will be important. Will it drive all dirty money out of the UK? Unlikely, but it will make it harder to hide in plain sight. The reforms might be late, but at least they might not yet be too little.”

Thomas Cattee, head of white-collar crime at Gherson Solicitors LLP also commented on the role this regulation will open upfor the Serious Fraud Office (SFO): “This will give the SFO powers prior to opening an investigation in relation to a wider variety of offences to force parties to give it documents on a wider variety of suspected crimes and we can certainly expect it to use these S2A powers more extensively now. This new power to obtain information initially could result in the SFO opening more investigations into offences other than bribery and corruption. In what has been reported as difficult time this gives the SFO a chance to demonstrate that it is determined to investigate in the right circumstances all types of financial crime.”

Earlier this year, the UK government announced plans to regulate AI by implementing a new AI rulebook.

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