In advance of the parliamentary debates on the Economic Crime Bill, ICAEW submitted its response to MPs on 4 March 2022. While expressing support for the Bill, ICAEW had concerns about some of the detail.
The Bill was considered in Parliament on 7 March. A number of amendments to the Bill were proposed, including many with cross-party support. ICAEW is pleased that some of its concerns have been reflected in the amendments made in the Commons.
Length of transition period
The original draft of the Bill proposed an 18-month transition period between the Bill becoming law and the date that overseas entities had to be registered. ICAEW was concerned that this was too long and would defeat the purpose of the legislation by providing criminals time to restructure their affairs.
The amendments accepted in the Commons would shorten this period to six months. While the reduction is welcomed, ICAEW had called for a three-month period to be introduced.
Adequate resources and measuring effectiveness
In its response to the draft Bill, ICAEW called for more effective use of Unexplained Wealth Orders (UWO). It drew attention to the need to ensure adequate resourcing for law enforcement agencies in relation to UWOs. The government has brought forward amendments that will commit it to publishing an annual report on the use of UWOs in Parliament.
ICAEW is pleased to note the government’s stated intention to introduce a further Economic Crime Bill in the next parliamentary session with further measures, including “reforms to prevent the abuse of limited partnerships, new powers to seize crypto-assets … and measures to give businesses more confidence to share information on suspected money laundering”.
Other amendments in the Commons
Other amendments introduced by the government will amend the Sanctions and Anti-Money Laundering Act 2018 to remove the requirement to assess the appropriateness of making a designation and to consider the likely effect of a designation on a person, before placing that person on the designated list. In addition, they will enable the government to designate groups of individuals so as to enable the UK to align more rapidly with designations made by the EU, Canada and the US via an urgent procedure.
Penalties for non-compliance with registration requirements will be increased from fines of £500 per day to fines of up to £2,500 per day and will include prison sentences of up to five years.
The Bill is currently being considered in the House of Lords.