The government introduced new legislation on 15 March 2022 aimed at stopping or significantly reducing the flow of ‘dirty money’ into the UK (particularly in the property sector) and to increase transparency of those engaging in such transactions. In particular members should be aware of the following measures and take care to check that they and their clients are complying with the new requirements.
Register of overseas entities
UK property purchases, particularly where corporate structures and trusts based in secrecy jurisdictions are involved in the transaction, have been an attractive method to launder illicit funds. The new register, which Companies House plans to implement as quickly as possible, places disclosure obligations on overseas entities owning or wishing to own UK land.
Overseas entities who are new purchasers will need to identify their beneficial owners and register them with Companies House. The rules will also apply retrospectively to property bought on or after 1 January 1999 in England and Wales, and 8 December 2014 in Scotland. Any overseas entity selling properties between 28 February and the full implementation of the register will also be required to submit their details at the point of sale.
Breach of these restrictions is a criminal offence punishable by a fine of up to £500 per day or a prison sentence of up to five years. In addition, to all the other AML obligations, members with clients to whom this applies should confirm that the register (once available) has been completed.
Some FAQs relating to the register can be found here.
And some more general information here.
Sanctions
New measures have been introduced to make it easier for the Office for Financial Sanctions Implementation (OFSI) to impose significant fines on those who do not comply with the sanctions. OFSI will also be able to publicly name organisations that have breached financial sanctions, even if they have not received a fine.
This underlines the importance of checking the sanctions list and complying with the sanctions obligations including reporting to OFSI as soon as practicable if they know or have reasonable cause to suspect, in the course of carrying out their business, that they have encountered a person subject to a financial sanction or who has committed a financial sanctions offence: https://www.gov.uk/guidance/suspected-breach-of-financial-sanctions-what-to-do.