Warning ahead of Register of Overseas Entities launch

Solicitors’ leaders are alerting lawyers to the impending launch of the Register of Overseas Entities (ROE) which will introduce new responsibilities and risks into some property transactions*.

The UK government announced last week that the new register, created under the Economic Crime (Transparency and Enforcement) Act 2022, will come into force on 1 August.

Law Society of England and Wales president I. Stephanie Boyce said:

“We have produced an interim note to alert those acting in property transactions involving overseas entities about the changes that are being introduced at pace.

“Failure to comply with registration in the ROE is potentially a criminal offence** so it is important that members are aware of the new register and their responsibilities.

“Parts of the Companies House registration process could be complex, including complying with third-party verification requirements.

“Getting the information necessary to obtain registration in the ROE may prevent or delay application being made to HM Land Registry with all the risks that this would entail.

“The verification requirements for the ROE are not the same as the procedures in place for complying with anti-money laundering legislation, providing ID for lenders or for Land Registry.

“Solicitors are advised to exercise caution when assessing whether they are in a position to provide such verification.”

The Law Society will very shortly be issuing more comprehensive guidance on what members should consider when acting in transactions involving overseas entities, including the risks associated with verification.

* Information must be provided about the beneficial owners to Companies House if you are acting for overseas entities who will be buying freehold or leasehold properties or taking a new lease of properties that will need to be registered at HM Land Registry already own properties registered at HM Land Registry; or have since 28 February 2022 sold, charged or leased property registered at HM Land Registry

This information about beneficial owners will then be entered on the new register and registration at HM Land Registry cannot take place until this has occurred.

The Register of Overseas Entities (ROE) also applies to those acting for UK companies that are buying property from overseas entities.

** Failure to comply is potentially a criminal offence both for the entity and its officers, (subject to mitigation and transitional provisions) punishable by a fine and/or imprisonment.

Kindly shared by The Law Society of England and Wales