Financial Crime

Issue 1159 / 12 May 2022

UK Parliament

The Economic Crime (Transparency and Enforcement) Act 2022 (Commencement No. 1) Regulations 2022 - Statutory instrument published - 9 May 2022

The Economic Crime (Transparency and Enforcement) Act 2022 (Commencement No. 1) Regulations 2022 (SI 2022/519) (the Regulations) has been published under section 69 of the Economic Crime (Transparency and Enforcement) Act 2022 (the Act). The Regulations were made on 9 May 2022.

The Regulations bring into force on 15 May 2022 amendments to the Proceeds of Crime Act 2002 made by Part 2 of the Act, in relation to unexplained wealth orders (UWO). Among other things, these amendments:

  • enable UWOs to be imposed on respondents other than individuals by permitting an application to specify a person who is a responsible officer of the respondent (where a responsible officer can be, among other things, a director, manager or secretary of the respondent); and
  • enable the High Court to extend the period for making a determination where an interim freezing order has been made.

The Economic Crime (Transparency and Enforcement) Act 2022 (Commencement No. 1) Regulations 2022 (SI 2022/519)

UK Government

Queen’s Speech - Economic Crime and Corporate Transparency Bill - 10 May 2022

The Queen’s Speech has been delivered by Prince Charles at the Opening of Parliament, setting out the government’s legislative agenda for the next parliamentary session.

The speech touched on three bills that will be of interest to financial market participants: the Retained EU Law Bill, also known as the Brexit Freedoms Bill; the Financial Services and Markets Bill; and the Economic Crime and Corporate Transparency Bill. The Retained EU Law Bill and the Financial Services and Markets Bill are covered in the Brexit and General sections of this Bulletin, respectively.   

The Economic Crime and Corporate Transparency Bill (the Bill) aims to “further strengthen powers to tackle illicit finance, reduce economic crime and help businesses grow” by cracking down on kleptocrats, criminals and terrorists to drive out dirty money from the UK. The main elements of the Bill are:

  • broadening the Registrar of Companies’ powers so that they become a more active gatekeeper over company creation and custodian of more reliable data. This will include new powers to check, remove or decline information submitted to, or already on, the Companies Register;
  • introducing identity verification for people who manage, own and control companies and other UK registered entities. This will improve the accuracy of Companies House data to support business decisions and law enforcement investigations;
  • providing Companies House with more effective investigatory and enforcement powers, and introducing better data cross-checking with other public and private sector bodies;
  • tackling the abuse of limited partnerships (including Scottish limited partnerships) by strengthening transparency requirements and enabling them to be properly wound up;
  • creating powers to more quickly and easily seize and recover cryptoassets, which are the principal medium used for ransomware; and
  • enabling businesses in the financial sector to share information more effectively to prevent and detect economic crime.

The government comments that the Bill, which will extend and apply across the UK, will tackle economic crime, including fraud and money laundering, by delivering greater protections for consumers and businesses, boosting the UK’s defences and allowing legitimate businesses to thrive.

Queen’s Speech 2022

Briefing pack

The Wolfsberg Group

Negative News screening - Wolfsberg Group publishes FAQs - 11 May 2022

The Wolfsberg Group (the Group) has published FAQs clarifying how undertaking screening for ‘negative news’ and other forms of adverse information can enhance a financial institution’s awareness of the potential financial crime risk posed by existing and prospective customers.

The Wolfsberg Group, an association of leading international financial institutions that aims to develop frameworks and guidance for the management of financial crime risks, defines negative news as information available in the public domain which financial institutions would consider relevant to the management of financial crime risk.

The Group explains that, as there is no single universally agreed approach to negative news screening (NNS), the FAQs detail relevant considerations that financial institutions may find useful in setting out NNS standards.

The Group highlights that NNS should not be confused with other forms of searches, such as ‘sanctions’ or ‘politically exposed persons’ screening, which are traditionally list-based, and draws attention to separate guidance papers published by the Group on both topics.

The Wolfsberg Group Frequently Asked Questions (FAQs) on Negative News Screening

Press release