The UK Government has published long-awaited guidance on reasonable procedures to prevent fraud, starting the clock on the enforcement of the new corporate failure to prevent fraud offence introduced in the Economic Crime and Corporate Transparency Act 2023.

The new offence is set to come into force on 1 September 2025, with the nine-month implementation period designed to ensure organisations have time to comply before enforcement begins.

The guidance is critical as it will be a defence to an allegation of failure to prevent fraud where an organisation can show that it has reasonable procedures in place, or that it was unreasonable to expect it to have such procedures. The guidance informs what may amount to reasonable procedures and therefore has a crucial part to play in ensuring compliance and organisations having a defence should one ever be required.

The guidance follows the six familiar principles recommended for “adequate procedures” under the UK Bribery Act: top level commitment; risk assessment; proportionate risk-based prevention procedures; communication (including training); and monitoring and review.

The guidance is clear that it will “rarely be considered reasonable not to have even conducted a risk assessment”, cementing the expected risk-based approach to inform reasonable procedures. Key takeaways include group-level policies, training, and appointed fraud prevention personnel. However, what is ‘reasonable’ will depend on your organisation’s activities and risk exposure. It will be key to review any existing fraud prevention assessments and measures to determine whether what is in place is sufficient, or what further protections could be put in place.

The guidance provides further clarification on the relevant aspects of the offence, including how intention to benefit the organisation, the extraterritorial application of the offence, and associated persons will be construed. Further examples of fraud scenarios within the scope of the offence are also included.

We will provide further updates and deeper analysis on the guidance in due course. If your organisation is caught by the new offence, it is prudent to start planning now, reviewing relevant risk assessments and identifying actions required to allow any gaps to be filled or red flags to be addressed, with appropriate legal advice to secure best outcomes. Our corporate crime team can help, developing fraud risk assessments and advising on strategy in preparing ahead of the new corporate offence coming into force on 1 September 2025, including any concerns. We can also deliver training and support developing relevant procedures and processes. Get in touch now, we would love to work with you.

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