Overview

The Economic Crime and Corporate Transparency Bill aims to strengthen the UK's ability to combat economic crime and increase corporate transparency. Key changes include introducing a new offence for companies failing to prevent fraud and altering the rules around cost orders in civil recovery proceedings of criminal proceeds.

Description

This bill introduces two significant changes. Firstly, it creates a new corporate offence for companies failing to prevent fraud committed by associated individuals or employees, applying primarily to larger organisations. The definition of "large" and the threshold for this offence are subject to ongoing debate and refinement in Parliament. The bill outlines a defence mechanism for corporations who can prove they had reasonable fraud prevention procedures in place. Secondly, the bill revises rules regarding cost orders in civil recovery proceedings for economic crime. The exact nature of these revisions are subject to ongoing parliamentary debate, however the principle behind the changes is to ensure that the court considers the merits of the case and the impact of a costs order on all involved parties when deciding the appropriate cost order.

Government Spending

The bill's impact on government spending is indirect. While there are no direct cost figures provided, increased prosecution and civil recovery efforts could lead to increased costs for the government, but this may be offset by an increase in recovered criminal assets. The cost of implementing and enforcing the new regulations will also need to be considered.

Groups Affected

• Large and medium-sized companies: These companies will be most significantly affected by the new offence for failing to prevent fraud, requiring them to implement and maintain robust anti-fraud procedures. Penalties for non-compliance include significant fines.
• Enforcement authorities: The changes to cost orders in civil recovery cases may affect the financial burden on enforcement authorities pursuing cases of economic crime.
• Respondents in civil recovery proceedings: Changes to cost orders could impact financial responsibility during such proceedings.
• Individuals associated with companies: The individuals in question could face prosecution alongside companies found guilty of failing to prevent fraud.

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