The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is a landmark regulation designed to strengthen the UK’s fight against financial crime and improve corporate transparency.
According to SmartSearch, with many of its provisions coming into force as of 25 March 2025, the legislation presents a significant shift in compliance requirements for UK-based businesses. Companies must now familiarise themselves with the Act’s scope and ensure operational readiness to avoid severe penalties.
At the core of ECCTA is a commitment to combat fraud, money laundering, and the misuse of UK corporate structures. It builds upon the foundations of the 2022 Economic Crime (Transparency and Enforcement) Act, which focused heavily on sanction enforcement and identity verification following geopolitical tensions, notably the Russian invasion of Ukraine. ECCTA takes these measures further, introducing more stringent transparency obligations and new corporate responsibilities.
One of the most impactful changes introduced by ECCTA is the expansion of Companies House powers. The registrar will now be able to verify the identities of company directors and people with significant control (PSCs), as well as reject filings that include false or misleading information. This marks a major shift in corporate governance and places greater accountability on businesses to ensure data accuracy.
Another major provision of ECCTA is the introduction of broader transparency rules. Companies will be required to disclose more information about their ownership and control structures. This includes enhanced reporting on shareholders and PSCs—part of a broader strategy to eliminate opaque corporate arrangements that can conceal illicit activities.
Stronger anti-money laundering (AML) measures also feature prominently in the legislation. Businesses must now conduct more rigorous due diligence checks and maintain more accurate and up-to-date records. This includes verifying customer identities, sources of funds, and transaction patterns, with a heightened responsibility to detect and report suspicious activity.
ECCTA further establishes new criminal offences for failing to comply with its provisions. Notably, it introduces the offence of failing to prevent economic crime, which can expose companies to criminal prosecution if they haven’t taken reasonable steps to deter illicit behaviour. Accompanying these offences are harsher penalties, including larger fines and extended prison terms for individuals involved.
The regulation also brings reforms to the operation of limited partnerships, a structure previously susceptible to misuse. Under ECCTA, limited partnerships must now provide more detailed disclosures about their business activities and partners. Companies House will be empowered to investigate and, if necessary, dissolve partnerships involved in illicit conduct.
The implications for businesses are substantial. Compliance teams will need to reassess internal processes and allocate more resources to ensure obligations under ECCTA are met. This includes reviewing filing procedures, strengthening AML frameworks, and preparing for the possibility of regulatory audits.
The bottom line is clear: ECCTA represents a step-change in the UK’s approach to economic crime prevention. Companies that fail to act risk not only financial penalties but also reputational and legal fallout. Those that embrace the changes and proactively invest in compliance will be best positioned to navigate this new regulatory landscape.
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