According to www.lawgazette.co.uk, the Economic Crime and Corporate Transparency Bill will require Companies House to check the identity of company officers, tighten registration requirements for limited partnerships and enable better information-sharing on suspected money laundering.
However at its second reading yesterday, critics from all the main parties urged the government to back up the new powers with more resources and to create new offences to hold corporate executives personally to account.
Conservative Kevin Hollinrake noted that corporations are able to treat fines as 'simply a cost of doing business'. He told home secretary Suella Braverman 'The only way in which we will clamp down on this is to hold individual executives at the top of organisations to account and, if necessary, put these people in jail.'
Several MPs noted the absence from the bill of a 'failure to prevent' offence, one of the options presented by the Law Commission last June in its report on corporate criminal responsibility. 'The government are carefully assessing the options that were presented and are committed to working quickly to reform criminal corporate liability,' Braverman said.
The home secretary noted that the bill will remove the statutory cap on the Solicitors Regulation Authority’s financial penalty powers for disciplinary matters relating to economic crime. 'That will align the SRA with other regulators that have such flexibility,' Braverman said. 'Fewer cases will be referred to the Solicitors Disciplinary Tribunal, resulting in faster enforcement. There will be a credible deterrent and a more coherent response to breaches of economic crime rules.'
The Law Society has already criticised this position. 'We support the UK government’s ongoing commitment to tackling economic crime, preventing the misuse and abuse of limited partnerships and corporate structures, and increasing the integrity of the registers maintained by the Registrars of Companies,' said president Lubna Shuja. 'We do have a concern, however, over the government’s proposal to allow the SRA the ability to impose limitless financial penalties for economic crime disciplinary matters.'
Shuja said that there is little evidence that a parallel increase in the Financial Conduct Authority's fining powers have aided the fight against financial crime. 'Therefore, we do not have confidence that increased fining powers for the SRA would have a significant enough impact on the fight against economic crime to warrant the additional burden of regulation.'
The bill now goes to its committee stage for amendments to be considered.
