The Economic Crime and Corporate Transparency Act has made organisations criminally liable if they fail to prevent fraud by their employees.
The offence covers large companies (with 250 employees or more, and £36m or more turnover) if an employee or agent does a fraud or false accounting, for the firm’s benefit, and the firm did not have ‘reasonable’ prevention procedures – even if the firm didn’t know about it. The Government says it will publish guidance on what ‘reasonable’ means, before the law comes into force.
New powers
The Act also covers Companies House, which registers businesses, to do something about the absurdity that it’s far easier for criminals to set up a company with false names using unwitting householders’ addresses (for want of verification checks) than it is for the wronged householder to correct it.
What they say
Companies House Chief Executive Louise Smyth said: “These new powers are without doubt the most significant change for Companies House in our long history. We have known for some time that UK companies have been misused by criminals to commit fraud, money laundering, and other forms of economic crime and our thoughts have always been with those affected. We will now play a much greater role in preventing further abuse of the register. We will be taking unprecedented steps to crack down on fraudulent activities, help victims quicker and clean up the register by removing information we know to be incorrect. This will underpin our efforts to improve the quality and reliability of our data, which will in turn hugely increase the value of the register for businesses across the UK and beyond.” Nick Ephgrave, director of the Serious Fraud Office called the Act the most significant boost to the SFO’s ability to investigate and prosecute serious economic crime in over ten years. And Graeme Biggar, Director General of the National Crime Agency said the Act gives the NCA and police greater powers to seize and recover cryptocurrencies.
