What is the Economic Crime and Corporate Transparency Act 2023?

The Economic Crime and Corporate Transparency Act 2023 is a British law that came into effect on March 25th, 2025. This act is designed to strengthen measures against financial crime, fraud, and illicit business activities. It builds on previous economic crime legislation, aiming to improve corporate accountability and tighten anti-money laundering (AML) regulations.

Existing companies have a 12-month transition period to adjust to this new law, but will still be required to provide identity verification credentials for their directors and PSCs when their confirmation statement is due.

The ECCTA enhances the powers of the relevant authorities to investigate and prevent financial misconduct from occurring, whilst also aiming to increase transparency in company ownership.

Why is the ECCTA Important?

This act is one of the more significant reforms introduced to prevent financial crimes in recent years. This act helps:

• Protect the economy by reducing the number of loopholes criminals can use to escape prosecution. 
• Improve data integrity by making it a legal requirement to keep accurate, up-to-date records. 
• Hold organisations accountable by increasing the level of liability for corporate companies involved in economic crimes. Companies will also be punished with the new “failure to prevent fraud” law that ensures businesses follow processes correctly. 
• Increases transparency with mandatory checks for directors and other owners involved in a business. 
• Develop trust between companies, regulatory bodies and the public by using streamlined and universal compliance practices. 

What are the key features of the ECCTA?

This act introduces a number of new measures surrounding 

• Identity verification - PSCs (Person of Significant Control), directors and beneficial owners must register their identities with Companies House if they are filing any company information. This helps to reduce fraudulent dealings and hidden owners. 
• Failure to Prevent Fraud Offence - If an organisation does not put reasonable preventive procedures in place they can now be prosecuted if employees, or PSCs are found to have committed fraud. 

• Companies House rules - New regulations mean registrars have the power to reject, remove or question any suspicious or incorrect information to ensure all records are accurate and reliable.
• Increased liability - This new act makes organisations more liable for economic crimes committed by their employees. 

Any new companies need to go through verification checks, whilst existing companies including the director and PSCs will have a year to transition and complete the new verification process. 

ECCTA's Impact on your business

If you operate in a regulated sector, a strong anti money laundering solution is essential and required for your business. The Economic Crime and Corporate Transparency Act 2023 helps to reinforce these strict compliance measures by placing a greater emphasis on verifying companies, owners and PSCs. 

Ensure compliance with SmartSearch

Manual bookkeeping and switching to a new system can cause issues and manual errors, which can land your company in hot water. With SmartSearch’s automated verification systems, you can authenticate your directors, documents and beneficial owners easily and accurately. 

With our real time system, you’ll stay up to date with the latest Companies House regulations and rest assured that your records will always be compliant. In just a few minutes, SmartSearch makes it simple to meet any ECCTA responsibilities and flags any potential errors or issues to rectify. 

Book a demo today and see how we can keep your business confident and compliant amidst these new changes.