The UK Economic Crime & Corporate Transparency Act 2023 sets out two major reforms making it much easier for UK authorities to prosecute corporate wrongdoing:
- it substantially increases the circumstances in which a company can be held liable for crimes committed by their employees. Now, relevant offences committed by a company’s ‘senior managers’ can be attributed to the company. This reform came into force on 26 December 2023; and
- it introduces a new corporate offence of ‘failure to prevent fraud’, which criminalises companies that fail to prevent persons associated with them from committing a range of fraud offences. A company has a full defence where it had in place ‘reasonable procedures’ to prevent the fraud from occurring. On 6 November 2024, the UK government published its long-awaited guidance as to the new offence and the meaning of ‘reasonable procedures’; at the same time, it announced that the offence will come into force on 1 September 2025.
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