The UK new international economic crime laws – and Australia compared

The UK government has just enacted the Economic Crime (Transparency and Enforcement) Act 2022 which requires overseas entities holding UK real estate to disclose their beneficial owners. It also provides that no overseas entity can be registered at the UK Land Registries as the proprietor of a legal interest in UK land unless it has first been registered on the new beneficial ownership register at Companies House or is otherwise exempt. 

The UK has had a beneficial ownership of companies register for UK companies since 2016.  

“Around the world, many countries have created or have plans to create registers. In the EU, Member States had to introduce public company beneficial ownership registers by January 2020. As at May 2021, campaign group Transparency International said nine countries (including Italy and Spain) had still not properly done so”. See UK House of Commons Research Briefing 6 April 2022.

Australia is one of those nine. 

Transparency International notes that Australia

“faces several corruption challenges, including anonymous company ownership and money laundering”. It “shows severe deficiencies when it comes to corruption in international real estate. As a result of a 2006 law, properties can be bought and sold without due diligence and real estate agents, lawyers and accountants are not required to report suspicious activities. Australia currently doesn’t require individuals behind foreign companies, or beneficial owners, to disclose their identity when purchasing property”.

It gives examples of a Chinese police chief who embezzled money to buy Australian property; and an African general who bought “high-end real estate while his country battled civil war”.

Anti-Money Laundering and Counter-Terrorism Financing Amendment (Increased Financial Transparency) Bill 2022

Australia’s collective effort, most recently, was for a minority party to introduce into parliament in February 2022 the Anti-Money Laundering and Counter-Terrorism Financing Amendment (Increased Financial Transparency) Bill 2022 which, if passed into law, would have required the government to introduce legislation into the parliament by 30 September 2022 to attend to Australia’s outstanding international crime prevention commitments.

That is:

  • to extend the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to include designated services provided by lawyers, conveyancers, accountants, high-value dealers, real estate agents, and trust and company service providers; and
  • to establish a public register of the ultimate beneficial ownership (UBO) of companies and foreign companies registered in Australia, and of other legal persons and legal arrangements as appropriate, which may include foundations and trusts.

Needless to say, the bill in the Australian parliament was never going to proceed, but those introducing it made their point about the years of delay by Australia.  Hence the comment by the House of Commons library and Transparency International.

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See also Australia on a slide? – Murrays Legal

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