The government was put under pressure to bring forward this legislation following Russia’s invasion into Ukraine, with an aim to target and sanction Russian oligarchs who own properties in the UK.
This will give the government the power to impose and strengthen existing sanctions on those who hide their investments and ownerships behind shell companies, as the Register of Overseas Entities will require those behind foreign companies to reveal their true identities.
Those who do not will face restrictions on the selling or renting of the property under their ownership. Additionally, those who break rules could face fines of up to £2,500 a day or up to five years in prison.
Companies House has begun work to implement the register alongside the UK’s land registries. Any foreign company 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.
Further, reforms will be made to unexplained wealth orders (UWOs) to remove barriers to their use, increase the amount of time law enforcement is able to review material and protect law enforcement from incurring substantial legal costs for any unsuccessful cases where they acted reasonably.
Additionally, UWOs will be more effective against those who hold property in the UK via trusts and other complex ownership structures.
An annual report on the use of UWOs will also be published going forward.
A ‘kleptocracy cell’ was also announced by the prime minister Boris Johnson. This will be based in the National Crime Agency and has been created to target sanctions evasion and corrupt Russian assets hidden in the UK.
Home secretary, Priti Patel said: “This government has moved quickly to strengthen our response to Putin’s cronies and ensure that corrupt elites have nowhere to hide their dirty money in the UK.
“We will continue to work with our international partners to take the strongest possible action against those who enable this unprovoked aggression towards Ukraine.”
Chancellor of the exchequer, Rishi Sunak added: “Our Economic Crime Act will enable us to crack down harder and faster on dirty money and those who support Putin and his regime.
“We are using all of our financial might to send a clear message to the Kremlin that this criminal venture will end in total failure.”