The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 1) Regulations 2023

The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 1) Regulations 2023 was published on legislation.gov.uk, the official website for publicizing legal documents. The regulations bring into force various provisions under the Economic Crime and Corporate Transparency Act 2023 which includes legislation to hold companies responsible for the prevention of fraud.
To recall, the Act aims to combat financial crime, particularly money laundering, by holding companies accountable for preventing fraud. It introduces a „failure to prevent fraud“ offense, making organizations criminally liable if they lack reasonable anti-fraud procedures and someone associated with them commits fraud for the organization’s benefit. The Act further reforms corporate criminal liability, replacing the traditional „identification principle“ with a broader approach. It allows companies to be found guilty if a senior manager commits certain economic crimes within their authority. This change applies to a range of economic crimes and is not limited to large organizations. Additionally, the Act includes miscellaneous changes to various existing rules and Acts related to corporate governance and transparency in relation to fraud and fraud prevention. For more information on the Act, please refer to EventID 23553.
The new commencement regulations bring into force provisions that
– enable the HM Treasury to impose monetary penalties on top of other penalties in case of violations;
– establish defenses, exemptions, and exceptions under the Companies Act 2006 in relation to national securities concerns involving a company’s name and identity verification;
– amend the Proceeds of Crime Act 2002 which provide exemptions from money laundering offenses for regulated businesses dealing with a portion of a client’s assets;
– modify certain parts of the Sanctions and Anti-Money Laundering Act 2018, enabling regulations for enhanced due diligence measures to reference the Financial Action Tax Force’s list of high-risk countries;
– introduce regulations for sharing information among certain businesses to prevent, detect, or investigate economic crime offenses; and
– amend the Criminal Justice Act 1987 to expand the Serious Fraud Office’s pre-investigation powers beyond specific bribery and corruption offenses.
The commencement regulations also implement schedule 11 of the Act which specifies a list of activities deemed to qualify as „Economic crime offences“ for purposes of the Act.