UK New offence of failure to prevent fraud on the horizon
26/01/2023
Law firms and accountants that fail to do enough to prevent fraud are the targets of the UK government's Economic Crime and Corporate Transparency Bill.
Security minister Tom Tugendhat said that the government intends to introduce a new offence in the bill when it makes its way to the Lords that will be based on similar offences for bribery and tax evasion. Under such laws, prosecutors need only prove that organisations lacked "reasonable" or "adequate" controls to stop wrongdoing.
At present, prosecutors need to prove that a "directing mind" at a firm intended to commit the offence.
The director of the UK's Serious Fraud Office (SFO) backed the plans. SFO chief Lisa Osofsky said
- They had the "potential to transform prosecution" of the crime.
- Failure to prevent bribery offences was a game changer" after its introduction in 2010.
- It "supported our record £280m conviction of Glencore last November and has featured in nine of our twelve deferred prosecution agreements."
Dr Susan Hawley, executive director of Spotlight on Corruption, said
- “It is highly welcome that the corporate liability reform will finally make it onto the statute books”.
She called on the government to
- Take a “broad and ambitious” approach and
- To introduce “strong measures
- To hold senior executives to account where companies they lead engage in economic crime.”
SOURCE
https://www.scottishlegal.com/articles/new-offence-of-failure-to-prevent-fraud-on-the-horizon
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