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This blog post recaps the highlights from her Summit presentation and introduces key themes for the upcoming webinar.
The offence in a nutshell
The new Failure to Prevent Fraud offence, introduced under the Economic Crime and Corporate Transparency Act 2023, significantly expands the UK’s corporate liability regime. It makes it much easier to hold large organizations criminally liable when fraud is committed by employees, subsidiaries or third parties who are acting for the benefit of the company. Similar to the Bribery Act 2010 in some respects, the offence goes further in scope and reach, with real implications for international companies operating in or connected to the UK as well as UK companies with international operations. Neeta summarizes the Act’s aims to prove, “the fraudster intended to benefit (either directly or indirectly) the company.”
What are the offences?
Implications of the senior manager test
What are the potential defences?
What are reasonable prevention procedures?
- Risk assessments that are dynamic and specific to operations.
- Clear policies, due diligence tools, and monitoring systems.
- Strong governance and leadership support (budget, resources, and accountability).
- Training and communication across all levels.
- A culture that actively discourages fraud, not just compliance for compliance’s sake.
