Just 27 law firms become approved to verify property ‘overseas entities’
Thirdfort says less than 0.5% of firms have joined the Register of Overseas Entities after it went live in August last year suggesting that firms have taken heed of Law Society warnings.
Just 27 law firms have signed up to become UK-regulated agents to verify overseas entities, analysis from risk management platform Thirdfort reveals.
In total, 146 firms have registered with Companies House to become UK-regulated agents who can complete verification checks on beneficial owners of an overseas entity.
But of these businesses just 27 are law firms – or 0.3% of the 9,550 law firms in England and Wales, according to the Solicitors Regulatory Authority.
ESTATE AGENCY
Of the remaining 119 firms registered, 75 are accountancy firms and only one is an estate agency. The rest are a mixture of company formation, wealth management or other financial services firms.
The Register of Overseas Entities (ROE) came into force on 1 August last year, with entities given a six-month transitional period.
Held by Companies House, the register requires overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers.
Before the introduction of the ROE, The Law Society warned “any law firm acting as a verifier will face significant challenges and expose itself to significant risk, including possible criminal prosecution, regulatory sanction, and reputational damage.”
WARNINGS
Harriet Holmes, AML Services Manager at Thirdfort, says: “The lack of law firms becoming UK-regulated agents for verifying overseas entities suggests that firms have taken heed the Law Society’s warnings before the introduction of the ROE.
“Law firms are uncomfortable with the additional regulatory requirements they are forced to meet and the potential prosecution, sanction, or reputational risks.
“With 60% of overseas entities having registered by the 31 January 2023 deadline, it’s clear that the ROE has been a positive step forward and has revealed some of the criminals that own UK property.
“But with more than 10,000 entities having missed the registration deadline, there is a significant amount of work to do and a big question mark on whether Companies House has adequate resources to deal with a large amount of non-compliant entities.”
