Failure to Prevent Fraud Introduced

The Government has announced that:

• The offence will only apply to large companies, with small and medium enterprises [SMEs] being exempt;
• Individual liability for failure to prevent will not be introduced;
• The scope of the offence will encompass fraud and false accounting offences;
• The offence will apply if fraud is committed under UK law or if it targets UK nationals, even if the culpable organisation or employee is located overseas;
• The penalty fine would be unlimited;
• It will publish guidance on fraud prevention procedures and expectations on businesses in due course.

Firms should read the government-released factsheet on the offence to identify its potential implications.