Guidance

Offence of 'failure to prevent fraud' introduced by ECCTA

Guidance for large organisations on the offence created by the Economic Crime and Corporate Transparency Act 2023.

Documents

Economic Crime and Corporate Transparency Act 2023: Guidance to organisations on the offence of failure to prevent fraud

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Economic Crime and Corporate Transparency Act 2023: Guidance to organisations on the offence of failure to prevent fraud (Welsh version)

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Introducing a failure to prevent fraud offence: Impact assessment

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Introducing a failure to prevent fraud offence: Impact assessment (signed)

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Details

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) created a new corporate criminal offence of ‘failure to prevent fraud’.

This guidance provides advice to large organisations on procedures they can put in place to prevent fraud.

Under the legislation, an organisation will be criminally liable where:

  • a specified fraud offence is committed by an employee, agent or other ‘associated person’, for the organisation’s benefit
  • the organisation did not have ‘reasonable’ fraud prevention procedures in place

It does not need to be shown that company managers ordered or knew about the fraud.

The offence applies to:

  • all large incorporated bodies, subsidiaries and partnerships
  • large not-for-profit organisations such as charities if they are incorporated
  • incorporated public bodies

The offence does not apply to:

  • police forces
  • government departments

The offence will come into effect on 1 September 2025.

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We are reviewing them so that we can fix these.

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Updates to this page

Published 6 November 2024

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