UK begins trying to identify who owns its property and businesses
It took Russia’s invasion of Ukraine for UK authorities to start getting to grips with establishing the overseas owners of property in the country. These are the views of Companies House, the country’s register for businesses, which does not currently verify the identity of company directors wherever they are in the world. The agency said it will also use improved intelligence, data science and enforcement methods.
Individuals can hide behind shell companies to easily buy and sell property, part of the reason the country, and London in particular, is the global center for money laundering. The National Crime Agency reckons the UK launders around £100 billion (US$118 billion) a year, reports The Economist.
Companies House established its Register of Overseas Entities on 1 August 2022 as part of a series of as yet still somewhat vague new actions empowered by passed and upcoming new legislation for 2022-23. Speaking on the matter, Louise Smyth, chief executive and registrar of Companies says next year will be “what will be one of the most significant years for Companies House since it was created in 1844.”
The Register of Overseas Entities (ROE) was made possible by Parliament expediting the Economic Crime (Transparency and Enforcement) Bill following Russia’s invasion. Companies House worked with the land registries for the UK nations as well as law enforcement to develop restrictions on land and property, fines of up to £2,500 per day and even prison sentences of up to five years.
Overseas entities have until the end of January 2023 to inform Companies House as to who their registrable beneficial owners or managing officers are. Not all overseas entities, however. Only those that bought property of land from 1 January 1999 in England and Wales, from 8 December 2014 in Scotland and 1 August 2022 in Northern Ireland.
Any entities that disposed of land after 28 February 2022 will need to provide details.
The agency will use data to detect behavior patterns as well as the strategic and tactical threats of economic crime.
Future legislation to enable ID verification of all on register
Upcoming legislation has also been brought forward. The second Economic Crime Bill would allow Companies House to be part of further moves to prevent UK companies from being used for money laundering and corruption.
This is where digital identity verification will be rolled out to all new business registrants (around 800,000 businesses are registered each year) as well as existing directors. This is hoped to improve the quality of data held by the register and prevent people from stealing the identities of others to register a new company.
It is not entirely clear how this will be handled, simply that by the time new legislation is introduced, “we’ll be ready to verify identities of those registering and entering data, and to query the accuracy of the data, and when appropriate, take action to improve its accuracy through annotation or deletion.” Anti-money laundering (AML) checks often involve biometrics.
Ongoing work at the Land Registry also includes biometric identity verification, with providers such as Yoti already offering compliant products. The standards are in line with the UK government’s Good Practice Guide GPG45. The government is also working to establish a single sign-on for government services.
Further legislation will also improve how Companies House can work with law enforcement.
AML | biometrics | digital identity | identity verification | regulation