New Guidance Released for Corporate Fraud Prevention Offence
The government has published new guidance on the corporate criminal offence of ‘failure to prevent fraud’, introduced as part of the Economic Crime and Corporate Transparency Act (ECCT). This offence aims to hold large organisations accountable if they benefit from fraud committed by their employees, agents, subsidiaries, or other associated persons.
Key Points of the New Offence
Implementation and Scope The offence will come into force on 1
Broader Context Fraud continues to be the most prevalent crime in the UK, accounting for approximately 40% of all reported offenses in England and Wales. The government’s introduction of new anti-fraud measures is part of a broader strategy aimed at curbing fraudulent activities and safeguarding potential victims, including both individuals and businesses. The new offence aims to encourage organisations to build an anti-fraud culture, similar to how the failure to prevent bribery legislation has reshaped corporate culture since its introduction in 2010.
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Applies to large, incorporated bodies, subsidiaries, partnerships, and incorporated not-for-profit organisations like charities Organisations may be held criminally liable if an associated person commits fraud for the organisation’s benefit Prosecution requires the organisation to demonstrate reasonable fraud prevention measures were in place
September 2025. It covers various fraudulent activities, including dishonest sales practices, concealment of important information from consumers or investors, and dishonest practices in financial markets. If prosecuted, the organisation must prove to the court that it had implemented adequate fraud prevention measures when the fraudulent activity occurred. Guidance Development The guidance was developed collaboratively with input from several government bodies and agencies, including:
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Crown Prosecution Service (CPS)
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Serious Fraud Office (SFO)
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HM Treasury
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HMRC
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Ministry of Justice
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Cabinet Office
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Attorney General’s Office
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Financial Conduct Authority (FCA)
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