UK warns foreign companies about the passing of the deadline to declare beneficial ownership

The UK government published a statement on 1 February on the passing of the deadline concerning the new anti-money laundering (AML) obligations that require foreign companies to declare their beneficial owners on the UK’s Register of Overseas Entities. The government states that overseas companies owning UK land who have not complied with the new requirements to register their beneficial owners with Companies House, the deadline of which was 31 January 2023, could now face penalties including prosecution.

The new rules require overseas entities that own or lease land or property long-term in the UK to register with Companies House. The public Register of Overseas Entities, which came into force on 1 August 2022, was introduced as part of a package of measures developed in response to Russia’s invasion of Ukraine.

The government estimates that 19,510 out of a total of 32,440 registered overseas organisations have declared their beneficial owners. The information gathered will also be used for tax and revenue services, to help combat the illicit use of offshore trusts.

The statement explains that since the passing of the deadline for registration, Companies House is now assessing and preparing cases for enforcement action. However, a Companies House blog post published on 3 January acknowledge that overseas entities going through the process for the first time may find it difficult to meet the deadline, as such companies will need to demonstrate that they started the process and aim to complete it as soon as possible after the deadline. The statement reads ‘While Companies House can not give you an extension they may take this into consideration against any further enforcement action.’

The new anti-corruption measures are intended to target illicit wealth and expose overseas companies involved in money laundering. According to the government’s press release, the new measures have already had positive results, exposing Dr Ruja Ignatova, who is on the FBI’s most wanted list, as the beneficial owner of two intermediaries in Guernsey.

The UK government is also said to be investing up to £20 million of allocated spending on economic crime to tackle financial crime being carried out through companies. In addition to this, the UK’s Economic Crime and Corporate Transparency Bill includes provisions to: enhance the powers of Companies House; bring in further reforms to prevent the abuse of limited partnerships; introduce additional powers to seize and recover suspected criminal crypto-assets; introduce reforms to give businesses more confidence to share information in order to tackle money laundering and other economic crime; and introduce new intelligence gathering powers for law enforcement and removal of nugatory burdens on business.