On 18 June, the Government published an action plan to prevent the misuse of companies and legal arrangements. The action plan was published as part of the Government's membership of the G8 which has endorsed core principles that are fundamental to the transparency of ownership and control of companies. The G8 principles are consistent with the standards of the Financial Action Task Force. The G8 has stated that it is committed to publishing national action plans that set out the concrete action each member will take.
The UK's action plan lists nine actions which are aimed at combatting a perceived lack of clarity about who really owns, controls and benefits from companies. The intention being to make it harder to launder money, evade and avoid tax, finance terrorism, bribe officials, hide stolen assets and evade financial sanctions. Whilst all nine action points are of interest, two will be of particular note for companies. These are:
ensuring the Companies Act 2006 and UK Money Laundering Regulations oblige companies to know who owns and controls them, by requiring that companies obtain and hold adequate, accurate and current information on their beneficial ownership, and
amending the Companies Act 2006 to require that this information is accurate and readily available to the authorities through a central registry of information maintained by Companies House, and consulting on whether such information should be publicly accessible.
At a time when the Government is aiming to change laws and regulations to ease the administrative burden on companies it will be interesting to see what exactly is proposed. In particular it will be interesting to see:
whether the obligations will extend to all companies,
the frequency with which affected companies will have to make enquiries, and
what sanctions there may be for non-compliance by legal owners.
A consultation on the design of the new rules, including whether the register of beneficial ownership should be publicly available, is expected to be published by the Department for Business, Innovation and Skills later this summer.