There have been further developments in light of the on-going conflict in Ukraine that may be relevant to listed companies.
Bill on register of overseas entities owning UK property becomes an Act
Under the Economic Crime (Transparency and Enforcement) Act 2022, which received Royal Assent on 15 March 2022, overseas entities that own land in the UK will have to be listed on a public register at Companies House (see our corporate blog post here for further details on this requirement).
The requirement will only come into force once the necessary secondary legislation has been passed but, once in force, any overseas entity that becomes, or has since 1 January 1999 become, the registered owner of any UK land will have to go on the register. Failure to register will be an offence and will affect the ability of the entity to sell or lease the land.
An overview of the impact of the Act, and the transitional provisions in relation to land already owned by overseas entities, is available here.
Sanctions
The Act also makes significant changes to the sanctions regime in the UK which will have wider and longer-term ramifications beyond the conflict in Ukraine.
Of particular interest to listed companies are the amendments made by the Act to the Policing and Crime Act 2017. Once in force, the amendments will introduce a strict civil liability regime in the UK for companies that breach financial sanctions legislation – there will no longer be a requirement to know about, or have reasonable cause to suspect, relevant matters (for example that a transaction involves a Designated Person). We understand the Government plans to bring these changes into force in three months' time.
The Treasury will also be given the power to publish reports in cases where a monetary penalty has not been imposed but it is satisfied that a person has breached a prohibition or failed to comply with an obligation imposed under financial sanctions legislation (on the balance of probabilities).
The implications of these changes will need to be considered in relation to any ordinary course corporate actions which involve payments to shareholders.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
