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The Economic Crime and Corporate Transparency Act 2023 (ECCTA) created a new corporate criminal offence of failure to prevent fraud.
This guidance provides advice to large organisations on procedures they can put in place to prevent fraud.
Under the legislation, an organisation will be criminally liable where:
- a specified fraud offence is committed by an employee, agent or other associated person, for the organisations benefit
- the organisation did not have reasonable fraud prevention procedures in place
It does not need to be shown that company managers ordered or knew about the fraud.
The offence applies to:
- all large incorporated bodies, subsidiaries and partnerships
- large not-for-profit organisations such as charities if they are incorporated
- incorporated public bodies
The offence does not apply to:
- police forces
- government departments
The offence will come into effect on 1 September 2025.
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