Jurisdiction(s):
United Kingdom

Failure to prevent fraud under ECCTA 2023: scope, UK nexus, comparison with bribery and tax evasion, enforcement trends and compliance implications

Published on: 02 September 2025

Published by a LexisNexis Corporate Crime expert

Legal News

Article summary

Since the failure to prevent fraud offence took effect on the first day of September 2025, there has been sustained debate about the compliance hurdles it will create for businesses and its likely impact on curbing corporate fraud. The offence, set out in section 199 of the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023), seeks to make large organisations answerable for fraud carried out by employees, agents, subsidiaries, or others who deliver services for or on the organisation’s behalf; where the conduct was intended to benefit the organisation or its clients. It encompasses various specified predicate fraud offences, as well as aiding, abetting, counselling, or procuring the commission of those offences. Illustrative examples include misleading sales tactics, concealing material information from consumers or investors, and dishonest behaviour in financial markets. The offence only applies where there is a UK connection—some act forming part of the underlying fraud must have taken place in the UK, or the profit or loss arising from it must have occurred in the UK. For many, its introduction is welcomed as the UK contends with what might be regarded as a challenge in this sphere, demanding attention from organisations and persons acting on behalf...

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