Explainer: What is the Economic Crime Act and how will it help the government tackle oligarchs?
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The government’s Economic Crime Bill, which gives the UK new powers to tackle oligarchs, has gained Royal Assent after being fast tracked through parliament.
In a statement, the government said the new laws will make it easier for the government to “tackle corrupt elites” and crack down on “Putin’s cronies.”
Notably, the law will require all overseas entities to register any properties they own with Companies House, with a view to increasing transparency and preventing oligarchs from laundering dirty money through the UK property market.
The law will see Companies House draw up a register of all “beneficial owners” of properties in the UK, putting foreign entities on a level footing with UK based property owners.
Those who fail to comply will face fines of up to £2,500 a day or five years in prison.
Unexplained Wealth Orders
The Economic Crime Act will also strengthen the powers the government has to seize assets through Unexplained Wealth Orders (UWOs), by removing key barriers that have limited them from being used since they were first introduced in 2017.
UWOs give Courts the power to force people to explain the sources of any unexplained wealth. Those who fail to explain the sources of their wealth can have their assets seized by enforcement agencies.
The new law will expand the government’s powers under to enforce UWOs, by allowing those who manage properties through complex offshore arrangements to be targeted with UWOs, even if they are not the beneficiary.
The National Crime Agency (NCA) will also be protected from having to pay crippling legal costs if they acted reasonably but cases are unsuccessful. The laws also give the NCA more time to prepare cases.
Sanction law strengthened
The bill also gives the UK more powers to impose sanctions, by ensuring anyone who handles dirty money is held to account under “strict liability,” meaning they can be held responsible for the crime even if they had no knowledge or reasonable cause to suspect that a transaction breaches sanctions.
The change means it will be easier to prosecute the banks and institutions which handle dirty money on behalf of sanctioned individuals.
Those found guilty will be liable to pay fines equivalent to £1m or 50 per cent of the sum they dealt with.
The new laws also allow the UK’s Office of Financial Sanctions Implementation (OFSI) to name and shame organisations that breach financial sanctions, even if no fine has been given.
Notably, the bill also gives new powers to seize crypto assets more easily.