Home Office introduces failure to prevent fraud offence
The Home Office has detailed a new failure to prevent fraud offence as part of an ongoing crackdown on financial crime.
The new offence means that organisations must demonstrate their deterrence measures should fraud be committed by an employee. Failure to do so risks incurring an unlimited fine.
The overall goal is to promote financial crime prevention, encouraging businesses to invest in this area and ensure their own processes are effective to protect consumers, businesses and the taxpayer.
The Home Office’s legislation is to be introduced within the Economic Crime and Corporate Transparency bill, supported by the Serious Fraud Office and Crown Prosecution Service.
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The new legislation will allow prosecutors to hold organisations accountable if an employee commits fraud for the organisation’s benefit, and reasonable prevention procedures were insufficient.
“Our new failure to prevent fraud offence will protect consumers from dishonest and misleading sales practices, and level the playing field for the majority of businesses that behave responsibly,” said security minister Tom Tugendhat.
“This government is committed to fighting economic crime, as demonstrated by our recently launched Economic Crime Plan 2, which set out how we will give law enforcement more state of the art resources to tackle high level offending.”
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“Tackling financial crime should be at the forefront of the government’s plans, and regulatory developments,” commented Dr Henry Balani, head of industry and regulatory affairs at anti-money laundering compliance firm Encompass Corporation.
Balani also pointed to the Financial Conduct Authority’s recent roadmap for the next 12 months, which promotes the prevention and detection of illicit activities.
“Harnessing technology solutions, alongside government and regulatory focus, can empower businesses to play their part in the response to financial crime, and, in doing so, help to ensure the UK maintains its reputation as a leading hub to do business with,” he added.
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