The UK Government has announced the introduction of a ‘failure to prevent fraud’ offence to the Economic Crime Bill, which is currently progressing through Parliament.

The Government has announced that:

  • The offence will only apply to large companies, with small and medium enterprises [SMEs] being exempt;
  • Individual liability for failure to prevent will not be introduced;
  • The scope of the offence will encompass fraud and false accounting offences;
  • The offence will apply if fraud is committed under UK law or if it targets UK nationals, even if the culpable organisation or employee is located overseas;
  • The penalty fine would be unlimited;
  • It will publish guidance on fraud prevention procedures and expectations on businesses in due course.

Firms should read the government-released factsheet on the offence to identify its potential implications.

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