The Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision relating to companies on the register kept by the registrar of companies (“the registrar”) in accordance with the Companies Act 2006 (c. 46). The provisions relate to financial penalties, appeals and enforcement.

The Regulations also amend the Register of Overseas Entities (Penalties and Northern Ireland Dispositions) Regulations 2023 in relation to the circumstances in which a financial penalty may not be imposed.

Part 2 confers power on the registrar to impose a financial penalty on a person if satisfied beyond reasonable doubt that the person has engaged in conduct amounting to a relevant offence, as defined in section 1132A of the Companies Act 2006.

Regulations 4 and 5 set out the process by which the registrar may issue warning and penalty notices, as well as the necessary content of such notices, and the time periods for issuing such notices.

Regulation 6 allows the registrar to vary or revoke a penalty notice, as they consider appropriate, subject to regulation 7.

Regulation 7 sets out the maximum financial penalty that may be imposed under these Regulations and the rules for imposing and calculating penalties under a penalty notice.

Regulation 8 describes the process by which a person who has received a penalty notice may appeal and the time limits for applying for such an appeal.

Regulation 9 allows the registrar to recover the financial penalty (with any accrued interest) after the expiry of the period stated in the penalty notice, if no appeal has been brought or if an appeal has been determined or withdrawn. It also describes how the financial penalty is treated for recovery purposes in England and Wales, Northern Ireland and Scotland.

Part 5 makes amendments to the Register of Overseas Entities (Penalties and Northern Ireland Dispositions) Regulations 2023. Regulation 11 substitutes a new regulation 3(2), which clarifies the circumstances in which a financial penalty may not be imposed and aligns with the amendments made to the Economic Crime (Transparency and Enforcement) Act 2022 by the Economic Crime and Corporate Transparency Act 2023. Regulations 12 to 20 make minor amendments to clarify the process for issuing a financial penalty and the calculation of such a penalty.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.