Source · Select Committees · Treasury Committee
Recommendation 50
50
Accepted
Paragraph: 230
Reform of Companies House is essential if UK companies are no longer to be used...
Conclusion
Reform of Companies House is essential if UK companies are no longer to be used to launder money and conduct economic crime. We welcome the work being done by the Department for Business, Energy and Industrial Strategy and by Companies House to modernise the legal framework and operations of Companies House. However, the pace of change is slow. The problems with UK company structures were identified by the Government in 2014 in the UK Anti-Corruption Plan. While there have been welcome innovations, such as the People with Significant Control register, on current plans it will have taken over 10 years to improve matters, during which time a large number of UK companies may have been put to criminal use by a wide range of criminals.
Government response summary AI-generated
The government recognises the importance of delivering Companies House reform, and says HM Treasury has provided BEIS with £63 million over the Spending Review period to facilitate reforms.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
230
Government Response
Accepted
HM Government · verbatim extract
Accepted
The UK is a global leader in beneficial ownership transparency. Last year, under the UK’s leadership, all G7 countries committed to strengthening and implementing beneficial ownership registers. The UK is also driving forward ongoing discussions at the FATF to bolster its international standards on company beneficial ownership transparency, to ensure there are no weak links in the global financial system. The government has brought forward expedited legislation to crack down on dirty money in the UK and corrupt elites. This was introduced to Parliament following Russia’s invasion of Ukraine. Further measures will be introduced as part of a wider bill later in the coming months to safeguard and support the UK’s open economy, whilst cracking down on people abusing that openness This legislation will be complemented by the Companies House reforms planned in the Third Session. Companies House reform will bear down on the use of thousands of UK companies and other corporate structures as vehicles for facilitating international money laundering (including illicit Russian finance), corruption, terrorist financing and illegal arms movements. Measures to tackle the misuse of Limited Partnerships will increase transparency over Limited Partnerships and force them off the register under specific conditions. Due to outdated legislation, Limited Partnerships have been a particular vehicle of choice for misuse. These reforms to Companies House and the Register of Overseas Entities Beneficial Ownership will maintain the UK’s position as a world leader in corporate transparency. The Register of Overseas Entities Beneficial Ownership is one of the first of its kind in the world. It will enhance our already strong reputation as an honest and trusted place to do business. Beyond the legislation brought forward this year, the UK made progress year on year since commitments in this area were made. As the committee notes, in 2016 we created a register of beneficial owners for domestic UK companies in 2016 and extended that register to Scottish limited partnerships in 2017. This was followed by a significant reduction in misuse. All the while, the UK has worked with the Crown Dependencies and Overseas Territories to support these reforms.
Read the full response on Parliament ↗