Building on the foundation laid by the Bribery Act, this offence holds companies accountable for fraudulent activities carried out by associated persons for their benefit. With its broader scope and stringent requirements, understanding the implications and preparing for compliance is crucial. In this Insight we address some of the most common questions regarding this significant legal development.
What does this offence do?
Like its predecessor Bribery Act offence, the new corporate criminal offence of "failure to prevent fraud" renders commercial organisations criminally liable for acts of fraud committed by associated persons acting to benefit the organisation or its customers. It however contains elements that do not apply to the Bribery Act offence and may be likely to be enforced more widely.
What behaviour it will catch?
False representations to win a contract; for example, greenwashing claims, finance staff manipulating figures to improve performance, providing false information to HM Revenue & Customs to evade tax, false statements made by directors and falsified accounting documents provided to induce a sale.
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