There is already a “failure to prevent fraud” offence in the UK Economic Crime and Corporate Transparency Act 2023 (ECCTA). If a senior manager commits an offence then the company/organisations also commits the offence in the eyes of the law. A “senior manager” can be anyone who’s role gave them the authority and autonomy to act in the illicit way they did; it is not limited to particular job titles in the organogram or hierarchical seniority. However, there is a “due diligence” defence for the company if they have a strong anti-fraud compliance programme in place.
If food fraud prosecutions are brought under the UK Crime and Policing Act enacted last month, however, there are important differences
- It applies to companies of any size (unlike the ECCTA which is limited to larger companies)
- There is no “due diligence” defence
- It includes offences conducted outside the UK
Although there is no “due diligence” defence, evidence of a strong compliance programme is still essential as this will inform the decision of whether it is in the public interest to prosecute. Other mitigation advice echoes best practice in food fraud defence but with a more internal focus. Companies should assess their internal vulnerabilities in terms of who in the organisation has the authority, autonomy, motivation and opportunity to commit fraud “on behalf of” the company.
Taken from an article by Osborne Clarke LLP – read the full article here.
Photo by Bermix Studio on Unsplash
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