From today, the failure to prevent fraud offence under section 199 of the Economic Crime and Corporate Transparency Act 2023 is in force.
Who is in scope? Large organisations meeting two of three tests: more than 250 employees, more than £36 million turnover, more than £18 million total assets (measured group-wide).
An organisation can be liable where an associated person commits a specified fraud offence intending to benefit it. The defence is having reasonable fraud prevention procedures, as described in Home Office guidance.
Information security link: fraud prevention procedures rely on access controls, segregation of duties, monitoring, reliable records and a strong speak-up culture. Smaller organisations are likely to see requirements flow down contractually from large clients.
Source: Economic Crime and Corporate Transparency Act 2023, section 199 (legislation.gov.uk)
This update is general information, not legal advice. If you would like help assessing the impact on your information security or privacy programme, contact us.
