Written 23rd April 2022 by Matthew Corn

Olliers’ Matthew Corn discusses a recent Podcast he featured on for the Institute of Chartered Accountants relating to the Economic Crime Bill

I was recently asked to speak to appear in a Podcast for the Institute of Chartered Accountants (ICAEW). In short they were presenting a feature on the effects of the war in Ukraine to their profession in terms of the current commentary around financial crime which has increased has increased massively in view of the sanctions imposed on Russian billionaires. The institute were mindful of new guidelines announced by the Financial Action Task Force relevant to their profession and in particular were keen to focus on the new Economic Crime Bill which has now in fact become law. I was asked to comment on whether the new economic crime act could have a significant impact in tracking down Russian assets covered by western sanctions and how it differs from what is already in place in terms of the Proceeds of Crime Act.

The Economic Crime Bill

As you can hear on the Podcast I discussed in broad terms the rationale behind the Economic Crime Bill which in essence was expedited through parliament as a part of the government response to what has happened in Ukraine as demonstrated by the placing of sanctions on the assets of Russian billionaires. The Economic Crime Bill is aimed at making it difficult for criminals to hide their wealth in the UK – especially through property purchases. The new act is intended to increase transparency by setting up a register of overseas entities and their beneficial owners and requires overseas entities who own land to register. It is basically designed to crack down on the flow of so called ‘dirty money’ to the UK and to tackle the £100bn of illicit financing the NCA estimates is channelled through the UK each year. Increased transparency would prevent individuals from hiding behind shell companies by requiring them to declare the beneficial owners of all property bought in England and Wales in the past 20 years.

Unexplained Wealth Orders

The act also updates the rules regarding Unexplained Wealth Orders (UWO) and removes key barriers to their use, increasing time available to law enforcement (such as the NCA) to review material provided in response to a UWO and protecting them from incurring substantial legal costs if they act reasonably in a case that is ultimately unsuccessful.

Existing measures to combat money laundering

I go on to briefly discuss in the podcast what is already in existence to counter money laundering and to seize or confiscate the assets of those believed to have a criminal lifestyle in the form of the Proceeds of Crime Act 2002 which introduced specific money laundering offences such as – converting, transferring, possessing criminal property, entering into money laundering arrangements. I also discuss the fact that POCA has been regularly updated and its confiscation regime post- conviction is also complimented by powers to impose Unexplained Wealth Orders which (in the absence of evidence explaining the origins of such wealth) can result in civil recovery action. My advice generally to the chartered accountants was to be aware of the provisions of the new act which may well require their expertise as the new act begins to take effect.