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Failure to prevent fraud: catch me if you can

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03 March 2023 / Anita Clifford
Issue: 8015 / Categories: Features , Fraud , Criminal , Regulatory , Financial services litigation
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Failure to prevent fraud… and more? Anita Clifford reports on the broadening scope of the proposed ‘failure to prevent’ offences & the likelihood of their success
  • The government has announced that new failure to prevent offences provisions will be proposed as an amendment to the Economic Crime and Transparency Bill currently before Parliament.
  • The provisions are likely to attract cross-party support and would make it an offence for an organisation to fail to prevent fraud and possibly also money laundering.
  • Organisations will be compelled to review their internal controls.
  • If the offence includes the failure to prevent money laundering just how the legislation will interact with anti-money laundering regulation will need to be worked out.

A radical expansion of the failure to prevent model is in sight following the government’s backing of a new corporate offence of failure to prevent (FTP) fraud and possibly other conduct such as money laundering. On 25 January 2023, security minister Tom Tugendhat MP announced that the

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