29/09/22

UK: New Bill to give SRA more power to fight economic crime.

As published on todaysconveyancer.co.uk, Thursday 29 September, 2022.

As the perpetual war on economic crime continues to be waged, a new Bill introduced into the House of Commons on 22nd September could be set to offer much needed reinforcements to solicitors’ regulators.

The government’s Economic Crime and Corporate Transparency Bill 2022 – dubbed the “Economic Crime Bill 2.0 by the Law Society – aims to give the Solicitors Regulation Authority (SRA) greater powers on economic crime disciplinary matters.

“We are pleased the UK government is introducing a second Economic Crime Bill, with the express provision of stopping money laundering in the UK,” said Law Society president I. Stephanie Boyce. She continued:

“The reforms which tackle economic crime, such as exemptions from the ‘principal money laundering offences’ – including acquiring criminal property and concealing and removing criminal property from England and Wales – will reduce unnecessary reporting by businesses to share information, while ensuring legal professional privilege is maintained.”

The Bill comes as a sequel to the Economic Crime (Transparency and Enforcement) Act 2022, which came into force earlier this year. One key outcome of the earlier Act was the creation of the Register of Overseas Entities, which requires overseas entities that own or acquire property in the UK to register with Companies House.

Further discussing the potential impact of the new Bill, Boyce said:

“The Companies House reforms will aim to improve transparency over UK companies to strengthen our business environment.

The Law Society has worked closely with Companies House and the department for Business, Energy and Industrial Strategy on the first Economic Crime Act and we have long supported changes which will improve the quality of information on the public register and look forward to continued close dialogue on the delivery of this new bill.”

However, the Law Society president made clear her and the Society’s “extreme concern” regarding elements of the Bill – namely, “the proposal to allow the SRA the ability to impose limitless financial penalties for economic crime disciplinary matters”. She added:

“The SRA’s fining powers have only just been substantially increased in relation to traditional firms and individuals from £2,000 to £25,000.

We are concerned about what the proposed additional powers could mean for our members and how effective they will be in combating economic crime.

We strongly urge the government to consider carefully the proportionality of any further regulation, given that there has been little evidence of the effectiveness or otherwise of the most recent changes to the SRA’s fining powers.

The proposed unlimited powers would potentially include many more serious or significant cases which currently go before the Solicitors Disciplinary Tribunal (SDT) and we maintain that this should remain the case.”