News & what's on - Written by on Wednesday, September 10, 2014 23:18 - 0 Comments

Failure to prevent economic crime: seismic shift in criminal law – may happen with stroke of a pen

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s216_jeremy-wright-960x640Those who would doubt the hardening enforcement environment in the UK toward corporate crime will no doubt have an answer to the new Attorney General, Jeremy Wright QC MP, maiden speech at last weeks Cambridge Symposium.  In a fairly long speech we have extracted some key elements.  The AG said:

“Tackling Economic Crime: a Priority Issue for HMG

The United Kingdom is the home of a global financial and business centre and has a responsibility to play a leading role in efforts to tackle economic crime and corruption. [our emphasis]

This Government has made it a priority to ensure we have the correct laws and structures in place tackle fraud and corruption, and to improve detection of money laundering.

We also need to have an accurate assessment of future risks that we face and ensure that we are using our resources as effectively as possible.

Since last year’s Symposium there have been a number of noteworthy developments in UK law enforcement’s response to economic crime;

Last year the Serious Fraud Office announced its first charges brought under the Bribery Act 2010.

In October 2013 the National Crime Agency opened for business. The National Crime Agency hosts an intelligence hub, economic crime command and cyber-crime unit. The NCA will play a vital role in assessing the risks we face from economic crime and informing our response to it.

In February this year, Deferred Prosecution Agreements (or DPAs) came into force in England & Wales. DPAs give prosecutors flexibility to deal with corporate offending where prosecution and the associated consequences (for example, reputational damage and redundancies) are not in the public interest.

The Government is legislating to implement a central registry of company beneficial ownership, to identify and tackle misuse of companies to hide criminal assets. Enhanced transparency of company ownership will help us to tackle tax evasion, corruption and money laundering.

However the evolving nature of economic crime means we need to continue to find and develop new ways to expose and combat it.

Government officials are considering proposals for the creation of an offence of a corporate failure to prevent economic crime, modelled on the Bribery Act section 7 offence.

Shortly, the UK Government will publish the first ever national anti-corruption plan. [our emphasis]

The laundry list of recent corporate scandals, the financial crisis and a voting public with deep distrust of politicians and so-called corporate ‘fat cats’ all add up to more legislation and tough talk from government and law enforcement.

We await the first ever national anti-corruption plan though this is expected imminently.  The fact there is one speaks for itself.

Proposals to create a failure to prevent economic crime offence would, if enacted, represent a seismic change in the criminal laws and their application to corporates.

Put another way the bar to prosecuting corporates for fraud would fall away.

While the AG speaks of its consideration we know others who are assessing how it might be introduced.  We understand some are of the view that the change could be effected easily and without primary legislation.

It will come.

History tells us that when new laws are enacted and placed in the hands of law enforcement officials they do get enforced.  Business should not adopt a head in the sand approach.

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