Economic Crime and Corporate Transparency Act 2023

36 Disqualification of persons designated under sanctions legislation: GB U.K.

(1) The Company Directors Disqualification Act 1986 is amended as follows.

(2) After section 11 insert—

“11A Designated persons under sanctions legislation

(1) It is an offence for a person who is subject to director disqualification sanctions to act as a director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company (but see subsection (2)).

(2) Subsection (1) does not apply—

(a) to the extent that an exception from subsection (1) has been created by virtue of section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018, or

(b) to anything done under the authority of a licence issued by virtue of section 15(3A) of that Act.

(3) It is a defence for a person charged with an offence under this section to prove that they did not know and could not reasonably have been expected to know that they were subject to director disqualification sanctions at the time at which they engaged in that conduct.

(4) In this section “person who is subject to director disqualification sanctions” means a person who under regulations under section 1 of the Sanctions and Anti-Money Laundering Act 2018 is a person subject to director disqualification sanctions for the purposes of this section and Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002 (see section 3A of the Sanctions and Anti-Money Laundering Act 2018).”

(3) In section 13 (criminal penalties), after “section 11” insert “or 11A”.

(4) In section 14 (offences by body corporate), for subsection (1) substitute—

“(1) Where—

(a) a body corporate is—

(i) guilty of an offence of acting in contravention of a disqualification order or disqualification undertaking or in contravention of section 12A or 12B, or

(ii) guilty of an offence under section 11A, and

(b) it is proved that the offence occurred with the consent or connivance of, or was attributable to any neglect on the part of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity,

the person, as well as the body corporate, is guilty of the offence and liable to be proceeded against and punished accordingly.”

(5) In section 15 (personal liability for company’s debts where person acts while disqualified)—

(a) in subsection (1)(a), after “section 11” insert “, 11A”;

(b) omit the “or” at the end of subsection (1)(a);

(c) after subsection (1)(b) insert “, or

(c) as a person who is involved in the management of the company, they act or are willing to act on instructions where—

(i) the instructions are given by a person whom they know at that time to be subject to director disqualification sanctions (within the meaning of section 11A),

(ii) the giving of the instructions does not fall within any exception from section 11A(1) created by virtue of section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018, and

(iii) the instructions are not authorised,

(but see subsection (3A)).”;

(d) in subsection (3)(b), after “(b)” insert “or (c)”;

(e) after subsection (3) insert—

“(3A) But—

(a) a person who is subject to director disqualification sanctions (within the meaning of section 11A) is not personally responsible under subsection (1)(a) for any relevant debts of the company incurred at a time when the person did not know and could not reasonably have been expected to know that they were subject to director disqualification sanctions;

(b) a person is not personally responsible under subsection (1)(c) for any relevant debts of the company incurred at a time when the person reasonably believed that the instructions were authorised.”;

(f) after subsection (5) insert—

“(6) Subsection (7) applies where a person (“P”) at any time—

(a) was involved in the management of a company, and

(b) acted on instructions where—

(i) the instructions were given by a person (“D”) whom P knew at that time to be subject to director disqualification sanctions (within the meaning of section 11A),

(ii) the giving of the instructions did not fall within any exception from section 11A(1) created by virtue of section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018, and

(iii) the instructions were not authorised,

unless P reasonably believed at that time that the instructions were authorised.

(7) For the purposes of this section P is presumed, unless the contrary is shown, to have been willing at any time thereafter to act on any instructions given by D.

(8) For the purposes of this section instructions are “authorised” if they are given under the authority of a licence issued by virtue of section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018.”

(6) In section 18 (register of disqualification orders and undertakings), in subsection (2A), after paragraph (c) insert—

“(d) persons who are subject to director disqualification sanctions within the meaning of section 11A;

(e) any licences issued by virtue of section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018.”

(7) In section 21 (interaction with Insolvency Act), in subsection (4), after “section 11” insert “, 11A”.

Commencement Information

I1 S. 36 in force at Royal Assent for specified purposes, see s. 219(1)(2)(b)

I2 S. 36 in force at 4.3.2024 in so far as not already in force by S.I. 2024/269, reg. 2(z)