What amendments are needed to the sanctions powers in the Economic Crime (Transparency and Enforcement) Bill being considered by Parliament?

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The Economic Crime (Transparency and Enforcement) Bill: four delegated powers that should be amended to improve future accountability to Parliament

3 Mar 2022

The Bill seeks to crack down on ‘dirty money’ and corrupt elites in the UK and is being expedited through Parliament following Russia’s invasion of Ukraine. This briefing identifies four delegated powers in the Bill that should be amended to ensure future accountability to Parliament.

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The scope and design of the delegation of power sought in any Bill raise important questions for MPs that go to the heart of their role as legislators. MPs should be clear about the level of authority they are delegating to government Ministers and be confident that they will not regret forgoing their ability to fully scrutinise future government decisions.

Our analysis of delegated powers in this and other Bills draws heavily on ‘legislative standards’ which we have derived from reports of the House of Lords Delegated Powers and Regulatory Reform Committee (DPRRC). The DPRRC is an influential committee and provides the nearest thing to a form of ‘jurisprudence’ (or ‘legisprudence’) in the area of delegated powers.

The Bill falls into three Parts:

Part 1 of the Bill makes provisions to set up a register of overseas entities and their beneficial owners, and requires overseas entities who own land in the UK to register in certain circumstances. The purpose behind these provisions is to combat economic crime, by requiring anonymous foreign owners of UK property to reveal their real identities to ensure criminals cannot hide behind chains of shell companies. We have identified at least 23 provisions that confer new delegated powers (not including the powers to make commencement, transitional and saving provisions). Of these, seven include powers that can be exercised to amend primary legislation (‘Henry VIII powers’).

Part 2 of the Bill makes provisions to reform Unexplained Wealth Orders by amending the Proceeds of Crime Act 2002.

Part 3 of the Bill makes provisions about breaches of financial sanctions by amending the Policing and Crime Act 2017. These Parts contain no provisions that confer new delegated powers.

There are four clauses of concern

Clause 14: Sections 12 and 13: supplementary
Clause 17: Power to modify application process etc in certain cases
Clause 23: Disclosure of protected information
Clause 38: Financial penalties

The exercise of the powers in the first three clauses is subject to the ‘negative’ parliamentary scrutiny procedure. In all three cases we recommend that parliamentarians should seek to amend the clauses so that the higher ‘affirmative’ scrutiny procedure applies. The briefing provides a suggested amendment to achieve this in each case.

The fourth and final clause of concern relates to the imposition of a financial penalty. Where the penalty for an offence may be set by delegated legislation, the maximum penalty that can be imposed should be set out on the face of the Bill. The Bill does not do this, so the briefing provides a suggested amendment to achieve this objective.

Cite this

Vangimalla, D. (2022) The Economic Crime (Transparency and Enforcement) Bill: Delegated Powers (London: Hansard Society)

Who funds this work?

This work is supported by the Legal Education Foundation as part of the Hansard Society's Delegated Legislation Review.

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