Published: 26 January 2023 5:05 pm  Author: Oliver Stanley

Economic Crime (Transparency and Enforcement) Act 2022 – what’s the latest?

What is happening at Companies House (“CH”) vis-a-vis the planned identification verification checks?

The White Paper makes it clear that ID verification will be possible either (i) directly via CH; or (ii) if completed by registered third parties.  CH does not want to risk “duplicating the checks that third parties and supervisors are already required to make”, but needs “to be assured that the identity verification checks… achieve at least the same standard of robustness of identity verification as… the direct verification route.”

So if you are a third party that is already carrying out ID verification (e.g. KYC) will this be enough and how will it work in practice?

From our conversations, CH have a number of ideas at the earlier stages of development but are still a way off implementation.  The changes brought in by the 2022 Act will see the greatest changes to CH in the past 100 years, and changes of that magnitude take time.  We hope that these changes will come into effect in 2023, but await further updates from CH.

• When it comes to becoming a registered third party for ID verification, CH is still to assess whether it will be sufficient to rely on the strength of the third parties’ own regulation (e.g. the SRA) or whether CH needs to assess and validate the providers itself.  We very much hope that they accept existing regulatory approval as sufficient to ‘authorise’ the third party to verify ID.
• CH seems open to the use of third party verification software as part of this process (it envisages using it itself for direct verification).  It may be that if you can show that you use a recognised system to complete your ID verification, that will be sufficient.  Therefore this could be a great opportunity for third parties that are already carrying out ID verification to use technology for both their internal requirements and any CH filings.

We are watching how matters develop closely and in regular contact with CH.  As a third party filing software provider ourselves, we will be implementing any necessary changes to ensure a seamless transition with (we hope) no impact on our customers.  When the time comes!