Minister of State for Security (): To strengthen corporate criminal liability a new
offence of failure to prevent fraud was included in the Economic
Crime and Corporate Transparency Act 2023. The offence is
intended to hold large organisations to account if they profit
from fraud and to drive a culture change towards improved fraud
prevention procedures.
The offence will hold corporates to account if they fail to
prevent a fraud that benefits them, or in some circumstances,
their clients. It is limited to large organisations and
partnerships only.
Organisations will have a defence in court if they can prove that
they had reasonable procedures in place to prevent the fraud, or
if it was not reasonable, in all the circumstances, to have any
procedures in place. The Government is required to publish
guidance to explain the fraud prevention procedures that
organisations should have in place to have a defence in the event
of prosecution.
The guidance is similar in structure to the guidance for the
existing offences of failure to prevent bribery in the Bribery
Act 2010 and failure to prevent the criminal facilitation of tax
evasion in the Criminal Finances Act 2017. Most organisations
subject to the offence will therefore be familiar with the
concepts and approach set out in the guidance.
In developing the guidance, the Home Office has worked closely
with prosecutors, regulators and across Government. We have also
engaged with industry, including trade/ professional bodies. The
Devolved Governments have also been consulted.
The guidance has been published today and is available on GOV.UK.
To allow organisations to prepare and develop their fraud
prevention procedures, Government intends to commence the offence
nine months after publication of this guidance.
