New “Guidance to organizations on the offense of failure to prevent fraud” from the United Kingdom

On November 6, “Guidance to organizations on the offense of failure to prevent fraud” under the Economic Crime and Corporate Transparency Act (ECCTA) 2023 was published in the United Kingdom. 

The ECCTA introduced a new corporate offence, namely “failure to prevent fraud offence,” which aims to criminally punish “large organizations” that do not take measures to prevent fraud committed by their “associated persons”. The new criminal offence will be in force as of September 1, 2025.

The Guidelines provide entities with specific instructions on how to prevent the new offence of “failure to prevent fraud” when committed within large organizations (i.e., having at least two of the following requirements: more than 250 employees, revenue in excess of £36 million, more than £18 million in total assets).

UK Companies, within six months of the release of the guidelines will have to review or adopt from internal policies related to fraud prevention.