Reforming the agency, to allow it to check who is behind companies and correct inaccurate data, has been in the wings for more than four years. Earlier this year, openDemocracy reported on a litany of fake names used by fraudsters and pranksters, with apparently no attempt to stop them. In April, openDemocracy revealed that UK government officials have had their identities stolen by fraudsters to create bogus companies.
With that in mind, the real test of the legislation will be whether new powers allow for proactive prevention of economic crime (not just identifying it after it’s happened). That will necessitate robust and comprehensive screening to weed out dodgy companies.
It will also require sufficient resourcing for the agency to implement its new powers. The current price of £12 to set up a company in the UK is ludicrously low (in the US it costs the equivalent of £400 to do so and in Australia £200). There is widespread agreement across the private sector, civil society and Parliament that this should be significantly raised to help fund Companies House’s powers to police the register.
Other than this reform – which is probably the most important economic crime reform of the decade and is crucial to get right – the bill also covers new powers to police crypto-assets and allow banks to share intelligence about bad guys. Law enforcement will now be able to seize crypto-assets where they are linked to criminality.
Concerningly, however, the Queen’s speech also included a new Financial Services and Markets Bill, to cut “red tape in the financial sector to make the UK an even more attractive place to invest and do business, while making sure that high standards are maintained”.
Specifically, the bill envisages rolling out the “safe adoption” of cryptocurrencies in the UK and “resilient outsourcing to technology companies”. This, plus the Brexit Freedoms Bill also included in the speech, suggests that a major deregulatory drive is on the agenda.
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