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News & opinion

17 MAR 2022

Economic Crime (Transparency and Enforcement) Act

Policy position statement:

RICS strongly supports the Economic Crime (Transparency and Enforcement) Bill that Parliament has recently passed and its efforts to combat money-laundering and corruption. We welcome Parliament’s clear intention to create greater clarity around ownership and the government’s efforts to ensure that the proceeds of crime and corruption are not being sheltered in UK property. We believe that this Act of Parliament and its proposed introduction of a register of overseas owners of UK property can play a crucial role in this regard through the provision of additional data.

As regulations and guidance are developed to support the legislation we would urge consideration of three key points:

Clarity about which entities are covered by the legislation

A wide array of different overseas entities and complex corporate structures are used to own UK property. Property professionals and their clients will need clear information to be able to determine with certainty whether an entity is in scope or out of scope of the legislation.

Efficient verification of information

Proper verification of the information on the register is crucial to achieving the purpose of the legislation and closing potential loopholes. We would urge the government to ensure that Companies House, and also the Land Registry, have the resources they need in order to carry out any registration responsibilities effectively and efficiently, so that the Act does not result in unnecessary delays to UK property market transactions.

The responsibilities of professionals in property transactions

We anticipate that obligations will be placed on professionals in relation to monitoring and maintaining the accuracy of the register. Careful consideration of where the onus of responsibility lies, given the different roles and access to information will be important  in supporting effective oversight and enforcement without imposing unnecessary regulatory burdens.

We anticipate that many of these points will be fully addressed through further communications or guidance, and we will continue to engage with government on these issues. In the meantime, we have made clear to our membership the importance of their compliance with sanctions, money laundering legislation and our Professional Statement “Countering bribery and corruption, money laundering and terrorist financing”.