Jurisdiction(s):
United Kingdom

ECCTA 2023 'failure to prevent fraud' offence: nine-month roadmap for reasonable procedures, risk assessment, AI and whistleblowing, investigations and DPAs for UK corporates

Published on: 28 November 2024

Published by a LexisNexis Corporate Crime expert

Legal News

Article summary

ECCTA and the failure to prevent fraud offence

The offence of failing to prevent fraud was brought in by the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) as part of a suite of initiatives designed to combat financial crime. It was also one of a number of measures directed at tackling financial crime. It extends the corporate failure to prevent framework, building on the failure to prevent bribery and failure to prevent the facilitation of tax evasion offences, created by the Bribery Act 2010 and the Criminal Finances Act 2017, respectively. Set out in sections 199–206 of ECCTA, it seeks to hold large organisations, regardless of their form, incorporation, or formation, to account for fraud carried out by employees, agents, subsidiaries, or others delivering services for or on its behalf, where the fraud was intended to benefit the organisation or its clients. It captures a range of specified underlying fraud offences, as well as aiding, abetting, counselling, or procuring the commission of any of those same underlying offences. Illustrative conduct includes ‘dishonest sales practices, concealing key information from consumers or investors, or dishonest behaviour in financial markets’. These provisions hold large organisations to account. Jurisdictionally, the offence requires...

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