UK Trends and Developments Contributed by: Sarah Keeling, Piers de Wilde, Dmitry Sachkov and Alexander Greenall, StoneTurn
Fraud remains the most commonly reported crime against individuals in England and Wales, according to the UK National Crime Agency’s National Strategic Assessment 2024. Over 3.2 million incidents of fraud were recorded in Eng - land and Wales in 2023, equating to roughly 37% of all reported crimes. Amid the increasing sophistication of fraud tools and techniques, the past 12 months have seen new UK legislation, proposed reforms and significant court judg - ments which are aimed at deterring fraud and facilitating timely asset tracing and recovery. Below, we examine six major developments in fraud prevention and asset tracing in the UK. They concern legal updates (the failure to pre - vent fraud offence government guidance and new authorised push payment fraud reimburse - ment rules); investigations and enforcement tools (the Serious Fraud Office’s first unex - plained wealth order and clarity on worldwide freezing order applications); and fraud tools and techniques (the use of crypto-assets and artifi - cial intelligence). Failure to Prevent Fraud Offence, Government Guidance Introduced in the Economic Crime and Corpo - rate Transparency Act 2023, a new corporate criminal offence of “failure to prevent fraud” will come into force on 1 September 2025. An organisation can be held criminally liable for this offence if an “associated person” , such as a staff member or a distributor, commits a fraud with intent to benefit the business. The UK govern - ment clarified in a guidance note published in November 2024 that the offence only applies to large organisations and their subsidiaries. Such organisations are those that meet at least two out of the following criteria: over 250 employees, over GBP36 million turnover, over GBP18 million in assets.
Commenting on the release of the official guid - ance, Lord David Hanson, the Minister of State for the Home Office responsible for fraud, noted: “Fraud is a pernicious crime… This guidance marks the first steps towards a corporate culture shift around fraud prevention.” However, the failure to prevent fraud offence concentrates on a relatively narrow set of sce - narios when an associated person committing fraud is looking to benefit their organisation rather than themselves (the latter of which is, ostensibly, a more common situation). Exam - ples of the behaviour falling within the scope of the offence include mis-selling products and services, deliberately obfuscating material infor - mation from potential or existing investors, and manipulating sustainability metrics. The last sce - nario makes the new offence a welcome addi - tion to the Financial Conduct Authority’s (FCA) anti-greenwashing rule, which came into effect on 31 May 2024. It is a full defence to the failure to prevent fraud charge for a company to demonstrate that it had “reasonable fraud prevention procedures” in place at the time of the fraud, illustrating the importance of all businesses developing robust internal controls and training programmes. The guidance sets out six guiding principles for dem - onstrating compliance: • strong top-level commitment; • thorough fraud risk assessments; • proportionate controls; • due diligence; • staff training and communication; and • ongoing monitoring and review. Although the guidance provides detailed (and numerous) best practices for each principle, it admits that future enforcement actions will
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