On March 25th 2025, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) formally came into action, phasing in several reforms since the law was originally ratified in 2023.
The Economic Crime and Corporate Transparency Act is a British law 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.
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.
By the autumn of 2025, new identity verification requirements should have been fully implemented. This legislation requires all directors and PSCs (people with significant control) of new businesses to verify their identity at the point of incorporation.
There will be a transition period of 12 months for existing companies, who will still be required to provide identity verification credentials for their directors and PSCs when their confirmation statement is due.
ECCTA's Impact on Businesses and AML Compliance
If you run a business in a regulated sector, you must ensure that AML compliance is met at all times. However, AML compliance is particularly important if new, enhanced due diligence processes are introduced. ECCTA emphasises and reinforces the importance of verifying beneficial business owners and corporate entities. This approach makes it more essential than ever to have robust anti-money laundering procedures when dealing with financial transactions.
The Economic Crime and Corporate Transparency Act 2023 is a form of legislation that is set to bring in sweeping reforms for British businesses., making it essential that those working within corporations and businesses are properly registered with Companies House.
ECCTA will also have an impact on most companies dealing with financial services in some form, so the likelihood that you'll need to get involved is high.
Please contact an AML and compliance expert if you'd like to see how we can help your business stay compliant with the law
Further Resources
For more information on the subject, please refer to the following links:
