Legislation – Economic Crime and Corporate Transparency Act 2023

“Identity verification obligations for persons with significant control

790LMInitial identity verification: registrable persons

(1)

This section applies in the following cases.

• Case 1 is where—

  1. (a)

     a company is incorporated in pursuance of an application for registration containing a statement under section 12A(1)(a) naming a person as someone who will, on the company’s incorporation, become a registrable person (“the registrable person”),

  2. (b)

     the application does not include a statement under section 12B(2) in respect of the registrable person or it appears to the registrar that the statement is false, and

  3. (c)

     the company has not given a notice under section 790LG(1) in respect of the person.

• Case 2 is where—

  1. (a)

     the registrar is notified under section 790LF that a person has become a registrable person in relation to a company (“the registrable person”), and

  2. (b)

     the notice does not include a statement under section 790LB(1) or it appears to the registrar that the statement is false.

(2)

The registrar must direct the registrable person to deliver to the registrar, within the period of 14 days beginning with the date of the direction, a statement confirming that the person’s identity is verified (see section 1110A).

(3)

The registrar may by further direction extend that period by up to 14 days at a time.

(4)

A direction under this section must be in writing.

(5)

A direction given to a person under this section lapses if notice is later given under section 790LG(1) in respect of that person.

(6)

In this section “registrable person” does not include a person mentioned in section 790C(12)(a) to (d).

790LNInitial identity verification for registrable persons: transitional cases

(1)

A person must deliver to the registrar the statement required by this section if the person—

(a)

is a registrable person in relation to a company at any time during the appointed day, and

(b)

either—

(i)

became a registrable person on the incorporation of the company in pursuance of an application for registration delivered before section 12B(2) came fully into force, or

(ii)

became a registrable person, otherwise than on the incorporation of the company, before the day on which section 790LB(1) came fully into force.

(2)

The statement required by this section is a statement confirming that person’s identity is verified (see section 1110A).

(3)

A statement required by this section must be delivered within the period of 14 days beginning with the appointed day.

(4)

But the registrar may by direction in writing extend that period by up to 14 days at a time.

(5)

In this section—

“the appointed day” means such day as the Secretary of State may by regulations appoint for the purposes of this section;

“registrable person” does not include a person mentioned in section 790C(12)(a) to (d).

(6)

The appointed day must not be before sections 12B(2) and 790LB(1) have been brought fully into force.

790LOInitial identity verification: registrable relevant legal entities

(1)

This section applies in the following cases.

• Case 1 is where—

  1. (a)

     a company is incorporated in pursuance of an application for registration containing a statement under section 12A(1)(a) naming a person as a person who will, on the company’s incorporation become a registrable relevant legal entity (“the entity”),

  2. (b)

     the application does not include a statement under section 12B(3) in respect of the entity, or is not accompanied by a statement under section 12B(4) by the person whose name is specified in the statement under section 12B(3), or it appears to the registrar that either statement is false, and

  3. (c)

     the company has not given a notice under section 790LG(1) in respect of the entity.

• Case 2 is where—

  1. (a)

     the registrar is notified under section 790LA that a person has become a registrable relevant legal entity in relation to a company (“the entity”), and

  2. (b)

     the notice does not include a statement under section 790LB(2), or it is not accompanied by a statement under section 790LB(3), or it appears to the registrar that either statement is false.

(2)

The registrar must direct the entity to deliver to the registrar, within the period of 28 days beginning with the date of the direction—

(a)

a statement by the entity that—

(i)

specifies the name of one of its relevant officers who is an individual and whose identity is verified, and

(ii)

confirms that the individual’s identity is verified, and

(b)

a statement by the individual confirming that the individual is a relevant officer of the entity.

(3)

The registrar may by further direction extend that period by up to 28 days at a time.

(4)

A direction under this section must be in writing.

(5)

A direction given to an entity under this section lapses if notice is later given under section 790LG(1) in respect of that entity.

(6)

In subsection (2) “relevant officer”—

(a)

in relation to a company, means a director;

(b)

in relation to a legal entity the affairs of which are managed by its members, means one of those members;

(c)

in relation to any other legal entity, means an officer of the entity whose functions correspond to that of a director of a company.

790LPInitial identity verification in respect of registrable relevant legal entities: transitional cases

(1)

A person must deliver to the registrar the statements required by this section if the person—

(a)

is a registrable relevant legal entity in relation to a company at any time during the appointed day, and

(b)

either—

(i)

became a registrable relevant legal entity on the incorporation of the company in pursuance of an application for registration delivered before section 12B(3) and (4) came fully into force, or

(ii)

became a registrable relevant legal entity, otherwise than on the incorporation of the company, before section 790LB(2) and (3) came fully into force.

(2)

The statements are—

(a)

a statement by the entity that—

(i)

specifies the name of one of its relevant officers who is an individual and whose identity is verified, and

(ii)

confirms that the individual’s identity is verified, and

(b)

a statement by the individual confirming that the individual is a relevant officer of the entity.

(3)

The statements required by this section must be delivered within the period of 28 days beginning with the appointed day.

(4)

But the registrar may by direction in writing extend that period by up to 28 days at a time.

(5)

In this section—

“the appointed day” means such day as the Secretary of State may by regulations appoint for the purposes of this section;

“relevant officer” has the meaning given by section 790LO(6).

(6)

The appointed day must not be before sections 12B(3) and (4) and 790LB(2) and (3) have been brought fully into force.

790LQRegistrable persons: duty to maintain verified identity status

(1)

A registrable person in relation to a company must ensure that, throughout the relevant period, they maintain the status of a person whose identity is verified (see section 1110A).

(2)

In this section “the relevant period” means the period—

(a)

beginning with—

(i)

the incorporation of the company, in a case where the person became a registrable person on its incorporation and the application for registration of the company included a statement under section 12B(2) in respect of the person,

(ii)

the delivery to the registrar of a statement in respect of the person under section 790LB(1), in a case where the person became a registrable person after the incorporation of the company and such a statement was delivered to the registrar,

(iii)

the expiry of the period for complying with the direction under section 790LM, in a case where a direction under that section is given to the person, and

(iv)

the expiry of the period for complying with section 790LN, in a case where that section applies to the person, and

(b)

ending on the giving of a notice to the registrar under section 790LF that the person has ceased to be a registrable person in relation to the company.

(3)

In this section “registrable person” does not include a person mentioned in section 790C(12)(a) to (d).

790LRRegistrable relevant legal entities: duty to maintain registered officer whose identity is verified

(1)

A registrable relevant legal entity in relation to a company must ensure that, throughout the relevant period, its registered officer—

(a)

is a relevant officer of the entity, and

(b)

is an individual whose identity is verified (see section 1110A).

(2)

In this section “registered officer”, in relation to a registrable relevant legal entity, means—

(a)

the person whose name is specified in—

(i)

a statement delivered to the registrar in respect of the entity under section 12B(3) or 790LB(2),

(ii)

a statement delivered to the registrar by the entity in pursuance of a direction under section 790LO(2), or

(iii)

a statement delivered to the registrar under section 790LP(2),

unless the entity has changed its registered officer under section 790LS, or

(b)

if the entity has changed its registered officer under section 790LS, the person specified in the latest notice under that section.

(3)

In this section “the relevant period” means the period—

(a)

beginning with—

(i)

the incorporation of the company, in a case where the entity became a relevant registrable legal entity on the incorporation of the company and the application for registration of the company included a statement under section 12B(3) in respect of the entity,

(ii)

the delivery to the registrar of a statement in respect of the registrable relevant legal entity under section 790LB(2), in a case where the entity became a relevant registrable legal entity after the incorporation of the company and such a statement was delivered to the registrar,

(iii)

the expiry of the period for complying with the direction 790LO, in a case where the entity is given a direction under that section, and

(iv)

the expiry of the period for complying with section 790LP, where that section applies to the entity, and

(b)

ending with the giving of a notice to the registrar under section 790LF that the entity has ceased to be a relevant registrable legal entity in relation to the company,

but see subsection (4).

(4)

If the registered officer of a registrable relevant legal entity ceases to be a relevant officer of that entity, “the relevant period” does not include the period of 28 days beginning with the day on which the person so ceases.

(5)

In this section “relevant officer” has the meaning given by section 790LO(6).

790LSRegistrable relevant legal entities: change of registered relevant officer

(1)

A registrable relevant legal entity may change its registered officer for the purposes of section 790LR by giving notice to the registrar.

(2)

The notice must include a statement by the entity that the new registered officer—

(a)

is a relevant officer of the entity, and

(b)

is an individual whose identity is verified (see section 1110A).

(3)

The notice must be accompanied by a statement by the individual who is the new registered officer confirming that the individual is a relevant officer of the registrable relevant legal entity.

(4)

In this section “relevant officer” has the meaning given by section 790LO(6).

790LTOffence of failing to comply with sections 790LM to 790LR

(1)

It is an offence for a person to fail, without reasonable excuse, to comply with—

(a)

any of the following sections—

• section 790LN;

• section 790LP;

• section 790LQ;

• section 790LR;

(b)

a direction under section 790LM or 790LO.

(2)

Where an offence under this section is committed by a registrable relevant legal entity, every officer of the entity who is in default also commits the offence.

(3)

A person guilty of an offence under this section is liable on summary conviction—

(a)

in England and Wales, to a fine;

(b)

in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.”

• “sections 1110A and 1110B (identity verification),”.

“(gc)

any document delivered to the registrar under regulations under section 1110B;”.

“Identity verification

1110AMeaning of “identity is verified”

(1)

For the purposes of this Act an individual’s “identity is verified” if—

(a)

the individual’s identity has been verified by the registrar in accordance with regulations under section 1110B, or

(b)

a verification statement in respect of the individual has been delivered to the registrar,

and the individual has not, since then, ceased to be an individual whose identity is verified by virtue of regulations under subsection (6).

(2)

A verification statement is a statement by an authorised corporate service provider confirming that it has verified an individual’s identity in accordance with regulations under section 1110B.

(3)

A verification statement must also specify the authorised corporate service provider’s supervisory authority or authorities for the purposes of the Money Laundering Regulations.

(4)

The Secretary of State may by regulations make further provision about the contents of verification statements (including provision amending this section).

(5)

Where a person is required or authorised by any other provision to deliver a statement to the registrar that an individual’s identity is verified, that statement may be delivered at the same time as the verification statement by virtue of which the individual becomes someone whose identity is verified under subsection (1)(b).

(6)

The Secretary of State may by regulations provide for circumstances in which someone ceases to be an individual whose identity is verified.

(7)

The provision that can be made under subsection (6) includes—

(a)

provision to confer a discretion on the registrar;

(b)

provision that someone ceases to be an individual whose identity is verified unless, within a specified period of time—

(i)

their identity is reverified by the registrar in accordance with regulations under section 1110B, or

(ii)

an authorised corporate service provider delivers to the registrar a statement: (A) confirming that it has reverified the individual’s identity in accordance with regulations under section 1110B, (B) specifying the authorised corporate service provider’s supervisory authority or authorities for the purposes of the Money Laundering Regulations, and (C) containing anything else required by the regulations.

(8)

Regulations under this section are subject to affirmative resolution procedure.

(9)

In this section—

“Money Laundering Regulations” means the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692);

“supervisory authority” means an authority that is a supervisory authority under the Money Laundering Regulations (see regulation 7 of those Regulations).

1110BVerification requirements

(1)

The Secretary of State may by regulations make provision for and in connection with verification or reverification of an individual’s identity for the purposes of this Act by the registrar or by an authorised corporate service provider.

(2)

The regulations may, in particular, make provision about—

(a)

the procedure for verifying or reverifying an individual’s identity, including the evidence required;

(b)

the records that a person who is or has been an authorised corporate service provider is required to keep in connection with the verification or reverification of an individual’s identity.

(3)

The regulations may create offences in relation to failures to comply with requirements imposed by virtue of subsection (2)(b).

(4)

The regulations must provide for any such offence to be punishable—

(a)

on conviction on indictment, by imprisonment for a term not exceeding two years or a fine (or both);

(b)

on summary conviction—

(i)

in England and Wales, by imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both);

(ii)

in Scotland, by imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fifth of the statutory maximum;

(iii)

in Northern Ireland, by imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fifth of the statutory maximum.

(5)

The provision that can be made in regulations under this section includes provision conferring a discretion on the registrar, including provision conferring power to impose requirements by registrar’s rules.

(6)

Regulations under this section are subject to affirmative resolution procedure.”

“identity is verified

section 1110A”.

• “sections 1098A to 1098H (authorised corporate service providers),”.

“(gb)

any application or other document delivered to the registrar under section 1098B, 1098D or 1098E or regulations under section 1098G (authorised corporate service providers);”.

“Authorised corporate service providers

1098AMeaning of “authorised corporate service provider”

In this Act “authorised corporate service provider” means a person—

(a)

whose application to the registrar to become an authorised corporate service provider for the purposes of this Act has been granted (see section 1098B),

(b)

who has not since ceased to be an authorised corporate service provider by virtue of section 1098F, and

(c)

whose status as an authorised corporate service provider is not for the time being suspended by virtue of section 1098F.

1098BApplication to become authorised corporate service provider

(1)

A person may apply to the registrar to become an authorised corporate service provider for the purposes of this Act if—

(a)

the person is a relevant person as defined by regulation 8(1) of the Money Laundering Regulations,

(b)

in the case of an individual, their identity is verified (see section 1110A), and

(c)

the person meets any other requirements imposed by regulations made by the Secretary of State for the purposes of this paragraph.

(2)

An application under this section must contain—

(a)

the name of the applicant’s supervisory authority or authorities for the purposes of the Money Laundering Regulations,

(b)

the required information about the applicant (see section 1098C), and

(c)

in the case of an application by an individual, a statement that the individual’s identity is verified (see section 1110A).

(See also section 1098D, which imposes restrictions on who may deliver an application under this section on behalf of a firm.)

(3)

Where an application is made under this section, the registrar must check with the supervisory authority, or at least one of the supervisory authorities, specified in the application, to find out whether the applicant is known to and supervised by that authority.

(4)

Having carried out that check, the registrar must grant the application if—

(a)

the supervisory authority, or at least one of the supervisory authorities, specified in the application has confirmed that the applicant is known to and supervised by that authority,

(b)

where the applicant is an individual, the registrar is satisfied that their identity is verified (see section 1110A),

(c)

any other conditions that may be specified by regulations made by the Secretary of State for the purposes of this paragraph are met, and

(d)

the registrar is not required by subsection (5) to refuse the application.

(5)

The registrar must refuse the application if it appears to the registrar that the applicant is not a fit and proper person to carry out the functions of an authorised corporate service provider.

(6)

The provision that can be made in regulations under subsection (4)(c) includes provision conferring a discretion on the registrar.

(7)

Regulations under subsection (1)(c) or (4)(c) are subject to affirmative resolution procedure.

(8)

For the purposes of this section—

“Money Laundering Regulations” means the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692);

“supervised”: a person is supervised by a supervisory authority if regulation 7(1) of the Money Laundering Regulations provides that it is a supervisory authority for that person;

“supervisory authority” means an authority that is a supervisory authority under the Money Laundering Regulations (see regulation 7 of those Regulations).

1098CThe required information about an applicant

(1)

The “required information” about the applicant, in the case of a firm that is applying to become an authorised corporate service provider, means—

(a)

firm name,

(b)

principal office,

(c)

a service address,

(d)

an email address,

(e)

the legal form of the firm and the law by which it is governed, and

(f)

if applicable, the register in which it is entered (including details of the state) and its registration number in that register.

(2)

The “required information” about the applicant, in the case of an individual who is applying to become an authorised corporate service provider, means—

(a)

name, nationality and date of birth,

(b)

a service address,

(c)

an email address, and

(d)

the part of the United Kingdom in which the person is usually resident or, if the person is usually resident in a country or state outside the United Kingdom, that country or state.

(3)

In subsection (2)(a) “name” means forename and surname.

(4)

Where the applicant is a peer or an individual usually known by a title, the requirement for the application to contain their name may be satisfied by providing that title instead of the individual’s forename and surname.

(5)

The Secretary of State may by regulations—

(a)

amend this section so as to change the required information about the applicant in the case of a firm or individual applying to become an authorised corporate service provider;

(b)

repeal subsection (4).

(6)

Regulations under this section are subject to affirmative resolution procedure.

1098DDelivery of applications under section 1098B on behalf of a firm

An application under section 1098B by a firm mentioned in the first column of the table—

(a)

must be delivered to the registrar on its behalf by a relevant officer mentioned in the second column who is an individual (see also section 1067A(2)), and

(b)

must be accompanied by a statement by the individual confirming their status as a relevant officer of the firm.

Firm	Relevant officer
company	director
body corporate other than a company	(a) where the body’s affairs are managed by its members, a member of the body; (b) in any other case, any officer of the body whose functions correspond to that of a director of a company.
partnership	(a) in relation to a limited partnership, a general partner as defined by section 3 of the Limited Partnerships Act 1907; (b) in relation to any other partnership, a member of the partnership
unincorporated body other than a partnership	(a) where the body’s affairs are managed by its members, a member of the body; (b) in any other case, a member of the governing body.

1098EUpdating duties of authorised corporate service providers

(1)

A person who is an authorised corporate service provider must notify the registrar of any change in its supervisory authority or authorities for the purposes of the Money Laundering Regulations within the period of 14 days beginning with the date on which the change occurs.

(2)

Where the change is the result of an agreement under regulation 7(2) of the Money Laundering Regulations, for the purposes of this section the change is not to be treated as having occurred until the authority that has agreed to act notifies the person or publishes the agreement under regulation 7(3).

(3)

A person who, without reasonable excuse, fails to comply with this section commits an offence.

(4)

Where the offence is committed by a firm, every officer of the firm who is in default also commits the offence.

(5)

A person guilty of an offence under this section is liable on summary conviction—

(a)

in England and Wales, to a fine;

(b)

in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.

(6)

In this section “Money Laundering Regulations” and “supervisory authority” have the meanings given by section 1098B(8).

1098FCeasing to be an authorised corporate service provider

(1)

A person ceases to be an authorised corporate service provider if the person ceases to be a relevant person as defined by regulation 8(1) of the Money Laundering Regulations.

(2)

The Secretary of State may by regulations—

(a)

provide for other circumstances in which a person ceases to be an authorised corporate service provider, whether automatically or as a result of a decision taken by the registrar;

(b)

provide for circumstances in which the registrar may suspend a person’s status as an authorised corporate service provider pending a decision by the registrar under regulations made by virtue of paragraph (a).

(3)

The provision that can be made under subsection (2) includes provision as to—

(a)

procedure;

(b)

the period of a suspension;

(c)

the revocation of a suspension.

(4)

The provision that can be made in regulations under subsection (2) includes provision conferring a discretion on the registrar.

(5)

Regulations under subsection (2) are subject to affirmative resolution procedure.

(6)

In this section “Money Laundering Regulations” has the meaning given by section 1098B(8).

1098GPower to impose duties to provide information

(1)

The Secretary of State may by regulations require a person who is or has been an authorised corporate service provider to provide information to the registrar in accordance with the regulations (including information for the purpose of monitoring compliance with the requirements of this Act).

(2)

The provision that may be made by regulations under subsection (1) includes provision requiring information to be provided on request, on the occurrence of an event or at regular intervals.

(3)

The circumstances that may be specified under section 1098F(2) include failure to comply with a requirement under subsection (1).

(4)

Regulations under this section may create offences in relation to failures to comply with requirements imposed by the regulations.

(5)

The regulations must provide for any such offence to be punishable on summary conviction—

(a)

in England and Wales with a fine;

(b)

in Scotland or Northern Ireland, with a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.

(6)

The provision that can be made in regulations under this section includes provision conferring a discretion on the registrar.

(7)

Regulations under this section are subject to affirmative resolution procedure.

1098HPower to enable authorisation of foreign corporate service providers

(1)

The Secretary of State may by regulations make provision for the purposes of enabling a person who is subject to a relevant regulatory regime under the law of a territory outside the United Kingdom to become an authorised corporate service provider, even if the person is not a relevant person as defined by regulation 8(1) of the Money Laundering Regulations.

(2)

In subsection (1) “relevant regulatory regime” means a regulatory regime that, in the opinion of the Secretary of State, has similar objectives to the regulatory regime under the Money Laundering Regulations for relevant persons and is likely to be no less effective in achieving those objectives.

(3)

Regulations under this section—

(a)

may amend any of sections 1098B to 1098G or insert new sections into this Act;

(b)

may make consequential amendments or repeals in other provisions of this Act.

(4)

Regulations under this section are subject to affirmative resolution procedure.

(5)

In this section “Money Laundering Regulations” has the meaning given by section 1098B(8).”

“authorised corporate service provider

section 1098A”.

• “section 1110C (identity verification: exemption on national security grounds),”.

“1110CIdentity verification: exemption on national security grounds etc

(1)

The Secretary of State may, by written notice given to a person, provide for one or more of the effects listed in subsection (2) to apply in relation to the person, if satisfied that to do so is necessary—

(a)

in the interests of national security, or

(b)

for the purposes of preventing or detecting serious crime.

(2)

The effects for which the notice may provide are that—

(a)

where a statement of proposed officers names the person as a director, section 12(2A) does not require a statement under that subsection to be made in relation to the person;

(b)

section 167G(3)(c) does not apply in relation to a notice of the person having become a director;

(c)

section 167M(1) does not apply in relation to the person and section 167M(2) does not impose any obligation on a company in relation to the person;

(d)

section 167N(1) does not apply in relation to the person;

(e)

section 1067A does not apply in relation to the delivery of documents to the registrar by the person on their own behalf or on behalf of another;

(f)

section 1098B(2)(c) does not apply in relation to the person.

(3)

For the purposes of subsection (1)(b)—

(a)

“crime” means conduct which—

(i)

constitutes a criminal offence, or

(ii)

is, or corresponds to, any conduct which, if it all took place in any one part of the United Kingdom, would constitute a criminal offence, and

(b)

crime is “serious” if—

(i)

the offence which is or would be constituted by the conduct is an offence for which the maximum sentence (in any part of the United Kingdom) is imprisonment for 3 years or more, or

(ii)

the conduct involves the use of violence, results in substantial financial gain or is conduct by a large number of persons in pursuit of a common purpose.”

“(dza)

any statement made in accordance with regulations made by virtue of section 1082(2)(c).”