UK Peers Vote to Include F.T.P Money Laundering & Remove S.M.E. Exemption.

Members of the U.K.'s House of Lords have tabled proposals to widen a new offence that will make companies criminally liable for failing to prevent fraud by their employees to

• Include money laundering, and
• Remove an exemption from the legislation for small to medium-sized companies [S.M.E.s]

In a vote late Tuesday, members of Parliament's upper chamber [Peers]

• Voted 179 to 176 in favour of altering an amendment to the Economic Crime and Corporate Transparency Bill to remove the exemption for companies that are not "large organizations" from the failure to prevent regime.
• Voted 176 to 160 in favour of inserting a new clause for companies that fail to prevent fraud and money laundering,

Lawmakers will vote on the legislation later this year.

Labor MP Margaret Hodge tweeted that the amendments were an

• "Incredible success. … If [government] upholds these, it will revolutionize our approach to corporate crime and give law enforcement the confidence to take on deep-pocketed criminals," she tweeted.

EDWARD GARNIER KC, A CONSERVATIVE PEER AND FORMER SOLICITOR GENERAL

In a significant intervention, the House of Lords put through two amendments tabled by Edward Garnier KC, a Conservative peer and former solicitor general.

Garnier said during the debate

• It would be "absurd" to limit the offense to large organizations, which by the government's definition, covers 0.5% of the corporate and partnership economy.
• That is the equivalent of us saying that every burglar over 6ft 6in is liable to be prosecuted … but every burglar under 6ft 6in gets off scot-free.
• If that is what the criminal law should be … well, that is strange

Garnier also argued that

• Extending the offence to include money laundering was "a very modest increase to the ambit" of the "failure to prevent" regime.
• He added that existing money laundering regulations failed to address Proceeds of Crime Act offences committed by company employees.

BACKGROUND

1. The government in April published a draft new corporate criminal offence of failing to prevent fraud to make it easier for criminal prosecutions to be brought against companies.
2. The proposals expand on similar offences for big companies failing to prevent bribery by their employees or agents and failing to prevent tax evasion.
3. But critics argued the offence might not be the "game changer" heralded by prosecutors because it was limited to fraud and false accounting and contained a carve-out for S.M.E.s.
4. The failure to prevent offence is among a series of changes to economic crime legislation designed to turn the screw on companies, including plans to make it much easier to bring corporate prosecutions by allowing companies to be held liable for the actions of senior managers.
5. The government outlined proposals in June to reform the identification doctrine, the requirement to prove that individuals who constitute the "directing mind and will" of the company knew about the wrongdoing.

Source

• https://www.linkedin.com/pulse/peers-vote-widen-business-fraud-law-cut-sme-house-lords-garnier-kc%3FtrackingId=OgQBKAaVrdNaouB4T6fSXQ%253D%253D/?trackingId=OgQBKAaVrdNaouB4T6fSXQ%3D%3D