There is a clear move towards transparency and reporting in the UK, which has become more prominent over the past few weeks amidst concerns about Russian wealth in the UK. These concerns were reflected in the Spring Statement – the published summary includes a section about “maximising economic pressure on Putin’s regime”, including reference to asset freezes, restricting access to the UK financial system, and international sanctions.
There was no direct reference to the recently enacted Economic Crime (Transparency and Enforcement) Act 2022, though there are clear connections. This legislation, which had been slow to progress, recently moved very swiftly up the agenda - the Registration of Overseas Entities Bill (ROE) was first issued in July 2018, setting out provisions for the establishment of a beneficial ownership register of overseas entities that own UK property, by 2021. The ROE was then not progressed further, and this was still the case a few months ago. However last week, the Economic Crime (Transparency and Enforcement) Act 2022 entered force, essentially fast-tracking the register of overseas entities (which is covered in Part 1 of the Act). Although not directly covered in the Spring Statement, the focus on fighting economic crime is certainly reflected in both the budget and the expedited passage of this legislation. The asset freezes, sanctions and other measures referred to in the Spring Statement all reflect the same principles and aims that drove the desire for a public register of beneficial ownership – specifically, the prevention of illicit funds entering the UK, either through our financial systems or the property market. The Government’s thinking is that the ambition to improve transparency should make it easier for investigators to identify owners of properties, discouraging the use of laundered funds to finance UK properties.