June 26, 2023 Penalties for Register of Overseas Entities Published
For some time, overseas entities have known about the threat of punishment for not complying with the Register of Overseas Entities; however, it was only last week that exact details were published, and it continues to show how seriously the UK government is taking economic crime.
On 21 June 2023, the Registrar published its approach to enforcement. Later that week new laws came into force giving the Registrar powers to impose financial penalties for non-compliance.
For entities that were required to register by 31 January 2023 and have not registered, the Registrar has now indicated that they will start taking enforcement action. This may include a civil financial penalty or criminal proceedings.
The Registrar may issue a warning notice if it suspects an offence has been committed that will outline:
- the grounds for suspecting an offence has been committed,
- that a person may email or write to Companies House within a period set out in the notice, which will be at least 28 days, to explain the mitigating circumstances and reasons as to why the entity has not complied.
- a warning that the Registrar may issue a penalty if a person does not contact Companies House within the period in the notice, or if it does not accept the explanation provided
Financial and Criminal Penalty
When determining the level of a civil penalty, the Registrar will consider any aggravating or mitigating factors. However, they have specified that for offences relating to the Register of Overseas Entities, the value of an entity’s property portfolio will be used to estimate the size of harm. For example, for failing to register during the transitional period, the penalty for each property will be as listed below.
|Property value||Penalty for each property|
The Registrar is still able to recommend criminal proceedings and other enforcement actions. Full details of the Registrar’s approach to enforcement can be found here: Register of Overseas Entities: approach to enforcement – GOV.UK (www.gov.uk).
If an entity complies with the requirements before the end of the warning notice period, the matter will be reconsidered.
We strongly recommend overseas entities take all action needed to register as soon as possible. If any of our clients have received a warning notice, please contact us immediately.
Visit our services page, for further details of our Register of Overseas Entities service.