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The Economic Crime and Corporate Transparency Bill’s Relevance to Insider Risk Management

by Lucas Seewald on October 18, 2023

This Article The Economic Crime and Corporate Transparency Bill’s Relevance to Insider Risk Management was first published on Signpost Six. | https://www.signpostsix.com/

Introduction

The UK government has rolled out the Economic Crime and Corporate Transparency Bill, a move aimed at shielding the financial landscape from unlawful activities. While its main target is money laundering, the bill also shines a light on insider risk management within organisations.

The ‘Failure to Prevent’ Framework

At the heart of the bill are the ‘failure to prevent’ offences. These rules mean that organisations could be in hot water if someone linked to them, like an employee or agent, gets involved in fraud or money laundering to benefit the organisation or anyone using its services. The saving grace? Having sound prevention measures in place when the offence happens. This part of the bill encourages organisations to be on the front foot in preventing fraud, a notion that goes hand in hand with managing insider risks.

Enhancing Corporate Transparency

The bill also brings in hefty changes to boost transparency in the corporate world, especially through reforms at Companies House. Improved transparency aids in the early detection of insider risks, establishing a stronger foundation for ethical business practices.

Companies House Reforms

The Economic Crime and Corporate Transparency Bill introduces several reforms to Companies House, aiming to make it more proactive in managing corporate information and flagging suspicious activities. Here are some key reforms:

1. Identity Verification:

All new and existing company directors, individuals with significant control, and members of limited liability partnerships (LLPs) will need to verify their identities.
This will help improve the accuracy and transparency of the data held by Companies House, making it easier for law enforcement to carry out investigations.

2. Increased Powers:

Companies House will have more power to check, remove, or decline information on the companies register.
This will help ensure that the financial information on the register is reliable and accurate.

3. Better Investigation and Enforcement:

New powers will allow for more effective investigation and enforcement actions.
Improved data cross-checking with other public and private bodies will also be introduced.
These changes aim to make Companies House a more active player in overseeing company creation and maintaining reliable data.

These reforms show the government’s commitment to improving corporate transparency and accountability, which are essential for preventing and detecting economic crimes, including those involving insiders.

Venturing into the Digital World

The bill makes a bold move into the digital sphere by giving law enforcement more power to clamp down on criminal crypto assets. This step is crucial in the digital age, where dodgy insiders might take advantage of the shadowy and boundless nature of crypto assets for illegal gains.

Signpost Six: Your Guide in Uncharted Waters

At Signpost Six, we support the proactive spirit of the Economic Crime and Corporate Transparency Bill. Our aim is to help organisations stay ahead in spotting, managing, and reducing insider risks, securing their operations from within. We have a range of tailored solutions for the UK market, designed to help organisations keep potential threats at bay.

Our expertise helps shape and roll out strong prevention measures, ensuring organisations are in line with the ‘failure to prevent’ rules of the bill, all while nurturing a culture of openness, responsibility, and resilience against insider threats.

Conclusion

As the Economic Crime and Corporate Transparency Bill opens a new chapter in the UK’s battle against economic crime, Signpost Six is here as a reliable partner for organisations navigating the complexities of insider risk management in this changing regulatory scene. Get in touch with us today to discover how Signpost Six can beef up your organisation’s insider risk management framework, ensuring a safe, compliant, and sturdy operational landscape in the UK.