Jurisdiction(s):
United Kingdom

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Key definition

risk definition

What does risk mean? In legal practice, risk describes the possibility that a reasonably foreseeable circumstance or event could adversely affect legal rights, regulatory compliance, business operations, or the security of systems and data. The term is widely used across legal contexts, with certain regimes articulating it expressly. Cybersecurity: In the EU NIS2 framework (as transposed in Ireland), risk means any reasonably identifiable circumstance or event having a potentially adverse effect on the security of network and information systems. In the UK, the Network and Information Systems Regulations 2018 adopt a comparable risk‑based approach to security and incident handling; while “risk” is not defined as...

UK Criminal Finances Act 2017 corporate offence: failure to prevent facilitation of tax evasion - HMRC six principles risk management guide for legal practitioners

Published by a LexisNexis Risk & Compliance expert

Practice notes

Why you need to manage this risk

The Criminal Finances Act 2017 (CFA 2017) gained Royal assent on 27 April 2017. It created corporate offences for failing to prevent the facilitation of tax evasion. There is only one defence—at the point the tax evasion facilitation offence was committed:

your organisation had prevention procedures in place that were reasonable to expect in the circumstances, or
it was not reasonable, in the circumstances, for you to have any prevention procedures in place

If you are familiar with the Bribery Act 2010’s failure to prevent offence, this will feel recognisable. You should ensure your organisation has prevention procedures that cover employees, agents and intermediaries, unless a risk assessment has determined such procedures are unnecessary. HMRC has issued guidance on the corporate offence, setting out six principles to shape your prevention procedures:

risk assessment
proportionality of risk-based prevention procedures
top-level commitment
due diligence
communication, including training
monitoring and review

Why should you care?

If the ‘maintaining a good reputation’ carrot doesn’t work for...

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Web page updated on 22/05/2026

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