Corporate criminal liability for economic crimes – Government guidance published

The Home Office has published statutory guidance for organisations on the new corporate offence of failure to prevent fraud, which will come into force on 1 September 2025.

The new, strict liability offence, which is contained in the Economic Crime and Corporate Transparency Act 2023 (ECCTA), will be committed by an in-scope organisation if an associate (which includes employees, agents and subsidiaries) commits a specified fraud offence, such as false accounting, with the intention of benefitting the organisation or any of its customers.

The company will have a defence if it had reasonable fraud prevention procedures in place (read more about the offence in our snapshot here).

The guidance that has been published sets out procedures that companies can put in place to prevent persons associated with them from committing fraud offences. The guidance covers the following:

• Overview – It gives an overview of the offence and clarifies issues around territoriality and "intention to benefit" (one of the elements required for the offence to be committed);
• Fraud prevention procedures – There are some general principles for organisations when developing or enhancing procedures to prevent fraud. The principles are organised around the six themes of top-level commitment, risk assessment, proportionate risk-based prevention procedures, due diligence, communication (including training) and monitoring and review. The guidance also includes some theoretical examples in different sectors/contexts; and
• Interaction with other regimes – The guidance discusses overlaps with other regulatory requirements, including the UK Corporate Governance Code provisions on risk assessment and the review and monitoring of material controls.

You can read more on the guidance in our corporate crime blog here.

The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 3) Regulations 2024, which will commence the ECCTA provisions containing the offence (sections 199 to 206 and Schedule 13) on 1 September 2025, have also been passed.

As well as introducing the failure to prevent fraud offence, the ECCTA also amends the Companies Act 2006 to facilitate the transformation of Companies House. It is being brought into force in stages to give companies the chance to prepare. You can read more about the staggered implementation of the ECCTA in our blog post here and access our snapshots on all of the provisions here.

Our upcoming webinar on the ECCTA

We will be discussing the implications for companies of the changes introduced by the ECCTA over the past year, and how to prepare for the significant changes still to come, in a webinar on Tuesday 26 November (12.30 to 1.15 pm GMT). Please click here to register.