Financial Crime Crackdown Hits BVI Entities with New Obligations in UK
The British Virgin Islands’ (BVI) entities holding property or land in the United Kingdom are now subject to new registration requirements aimed at combating economic crime. The UK Government’s Economic Crime (Transparency and Enforcement) Act 2022 came into force on March 15, 2022, introducing a Register of Overseas Entities and beneficial owners.
What are the New Obligations?
The legislation imposes significant obligations on BVI entities that own or intend to acquire UK property. These include:
- Registering with UK Companies House
- Identifying and verifying beneficial ownership information
- Providing annual updates
Who is Affected?
The Economic Crime Act applies to all BVI entities holding UK land or real property since:
- January 1999 in England and Wales
- December 2014 in Scotland
Failure to comply may result in:
- Criminal liabilities, including imprisonment for up to five years
- Financial penalties
- In extreme cases, non-compliant properties may be frozen, preventing owners from selling, leasing, or charging them.
What are the Consequences of Non-Compliance?
BVI entities are advised to review the Act’s requirements and seek legal advice to determine any applicable exemptions. The Register of Overseas Entities will be open for public inspection, revealing information about BVI entity ownership and beneficial ownership.
Why is this a Significant Step in Combating Financial Crime?
The move is a significant step in the UK’s efforts to combat financial crime. BVI entities holding property in the UK would do well to familiarize themselves with these new obligations to avoid potential legal consequences.
In summary, the Economic Crime (Transparency and Enforcement) Act 2022 requires BVI entities to register with UK Companies House, identify and verify beneficial ownership information, and provide annual updates. Failure to comply may result in criminal liabilities, financial penalties, or even property freezing. It is essential for BVI entities holding UK property to review the Act’s requirements and seek legal advice to ensure compliance.