Money Laundering Transparency & Trust discussion paper

Money Laundering Transparency & Trust discussion paper

HM-TreasuryOn 15 July, Dr Vince Cable, Secretary of State for Business, Innovation and Skills, announced the launch of the Transparency & Trust discussion paper. This sets out a number of proposals aimed at addressing opaque ownership structures and improving the accountability of company directors, to comply with the Money Laundering Regulations.

The proposed reforms seek to promote growth by improving confidence in the UK as an open and trusted place to invest and do business. Greater transparency and improved trust will mean honest entrepreneurs and investors are more willing to do business in the UK and are not disadvantaged by those who don’t play by the rules.

Business success, and therefore economic growth, depends on investors, employees, consumers and the wider public having confidence in business. When companies do business with each other, those transactions must also be built on trust.
An effective and trusted system that identifies and deals with poor business behavior reassures people that we operate fairly, and encourages honest entrepreneurs to invest in activities promoting growth and employment.

This paper considers a range of proposals to enhance the transparency of UK company ownership and increase trust in UK business, by linking closing with the new Money Laundering Regulations. This will help:

  • prevent illegal activity
  • better enable companies to be held to account
  • provide businesses, investors, employees and consumers with confidence that companies are acting fairly

The extensive range of proposals to aid money laundering compliance includes;

  • A central registry of beneficial ownership information  to be held at Companies House
  • Extension of Part 22 of the Companies Act extended to all companies, not just PLC’s
  • Validation checks for submissions of beneficial ownership information
  • Proposals to update beneficial ownership as it changes bringing into question the future of the annual return.
  • Making information more publicly available
  • Extending the investigative powers of the 1985 Act to other law enforcement agencies.
  • The abolition of bearer shares.

Changes will be made to the Companies Act and will be introduced alongside the 4th Money Laundering directive, from which many of the proposals are taken. This joint legislative change will take place 2014/2015.