With the growing frequency of financial crimes and the complexity of the same, it becomes increasingly crucial to have a strong Anti-Money Laundering (AML) compliance. This has led to a new official rule that has been implemented by the UK government: ‘failure to prevent fraud’ offence. IDMERIT UK’s AML solutions help businesses to stay ahead of evolving threats.
With the use of AML compliance Solutions provided by IDMERIT UK, the businesses can mitigate all the frauds and risks. As IDMERIT UK’s AML solutions use advanced technologies to find and help in preventing financial crimes. If one uses the solution provided by IDMERIT UK, they can effectively verify and confirm the identity and prevent the fraud from happening.
From September 1, 2025, a new official rule has been implemented by the UK: ‘failure to prevent fraud’ offence. All the companies need to implement this rule in their organization making them accountable if they benefit from fraudulent activity.
According to the UK government, the measure is designed to ensure companies are held accountable and can face prosecution “if they profit from fraud.”
Clarifying further the UK government added that large organisations/companies can now be held criminally liable if an employee, agent, subsidiary, or any other ‘associated person’ commits fraud with the intention of benefiting the business.
What all could be included in the list published by the UK government:
- Fraudulent sales practices.
- The companies hide important information from consumers or investors.
- Corruption in financial markets.
As per the UK government, if a company is prosecuted, they must demonstrate to the court that they have taken reasonable fraud prevention measures at the time when the fraud was committed.
As per the legal analysts the offence constitutes a crucial shift in UK corporate fraud enforcement, as the authorities no longer need to prove senior management’s involvement.
As per a regulatory specialist and partner at law firm Irwin Mitchell, Colette Kelly: “the new offence will have a significant impact on organisations and their risk exposure.”
The UK government did explain that the ‘failure to prevent fraud’ offence is designed to encourage an anti-fraud culture within organisations, similar to how failure to prevent bribery laws transformed corporate culture.
The failure to prevent fraud offences will be implemented from September 1, 2025.
According to the UK’s Serious Fraud Office (SFO) the above mentioned offence applies to organisations meeting two of the following criteria.
- Any organization with more than 250 employees.
- The turnover of the organization is above £36 million
- The total assets of the organization is more than £18 million.
According to the SFO, “The offence covers fraud committed anywhere in the world that has a connection to the UK.”
The organization is going to leverage its new powers to investigate and prosecute the most serious and complex fraud cases.
The new law as per Nick Ephgrave, director of the SFO is a “significant tool for prosecutors”.
Adding that the “Serious and complex fraud damages UK business and undermines our economy. The SFO is ready to act if corporations fail to comply with their new responsibilities.”
Guidance for companies on how the offence will work is available [HERE].
Identifying fraud as the most prevalent crime type in the UK, as per the government around 40% of all offences are from England and Wales. It said the new measures are designed to curb fraud and strengthen protections for both the individual victims as well as businesses victims.
The UK’s fraud minister, David Hanson said, “fraud is a shameful crime. We are determined to bring those responsible to justice wherever it takes place.”
