Companies House (the UK registrar of companies) has issued guidance that United Nations (UN) sanctions have led to extra checks on applications to register some corporate bodies in order to ascertain if ‘designated persons’ (DPs) are involved.
DPs are individuals and corporate bodies subject to financial sanctions because of the nature of their activities, such as genocide and terrorism.
Accountancy Daily reports that UN sanctions are included in EU and UK law to stop DPs using ‘economic resources’ (which includes companies) for those types of activities. There are penalties for breaking that law.
Companies House says if anyone forms a corporate body with a DP in the corporate structure, it would constitute making an economic resource available. It could also expose the Registrar of Companies to prosecution because of its role in the registration process.
From Wednesday 12 December 2018, Companies House will check the details of proposed directors, secretaries, members and people with significant control in all new applications to assess whether or not a DP is named.
This applies to applications to register UK companies (private, public, limited, unlimited, limited by shares, limited by guarantee); European companies, known as societas Europaea (SEs); limited liability partnerships and Scottish limited partnerships.
If it believes the details sufficiently match a DP, the application will be rejected. Applicants will then have the option to resubmit the application with evidence that the person is not a DP. There is guidance on the Companies House website as to which forms of identity and other material will support such an application.