ECCTA: Failure to prevent fraud guidance timeline update – 2025 implementation

The new “failure to prevent fraud” offence is unlikely to come into force before 2025, with guidance on reasonable fraud prevention procedures yet to be published by the Home Office. But organisations should not let it fall off their radar.

Since our previous update in May, the formation of a new UK government and the UK parliament’s summer recess have pushed back the publication on reasonable fraud prevention measures. The Home Office minister, Yvette Cooper, is still to announce an updated timeline for publication, but this is unlikely to be before recess ends on 2 September.

As the new offence is anticipated to come into force 6 months after the publication of the guidance, the earliest this could happen is March 2025, unless amended by the new government.

Despite the extended timescale, the offence is still expected to come into force. Corporate compliance requirements are due to increase further, with recent updates in the UK, EU, and globally all showing this trend is here to stay.

In the UK we have seen updates to the UK Corporate Governance Code, and a proposed Audit Reform and Corporate Governance Bill. The EU notably has passed the Corporate Sustainability and Due Diligence Directive this year, and Australia is due to implement a new failure to prevent bribery offence, which has many parallels with the UK Bribery Act, on the 8 September.

With the ongoing trend towards corporate transparency, and with ESG an increasingly key factor in tenders and contracts, it is more important than ever to ensure your corporate governance measures are up to date and appropriate for your operations.

Reasonable fraud prevention procedures are expected to include a requirement for relevant organisations to carry out detailed risk assessment, focusing on where individuals associated with the business have the means, motive, and opportunity to carry out fraudulent activities. Assessing your organisation’s exposure in advance of the publication of guidance will allow you to understand your specific risks and update your prevention measures promptly when the guidance is published.

Our ECCTA topic page includes further detail about the provisions of the Economic Crime and Corporate Transparency Act, including the “failure to prevent fraud” offence.

Our corporate crime team is here to help guide you through these changes including supporting assessment of risks and the potential impact of the new offence for you and your business. Get in touch with one of the team or your usual contact.

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