Failure to prevent fraud: countdown to commencement
19 August 2025
On 1 September 2025, the failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023 comes into force for UK and overseas large organisations (i.e., organisations or subsidiaries of parent undertakings with at least 2 out of 3 qualifying characteristics – more than £36 million annual turnover, more than £18 million on the balance sheet and/or more than 250 employees).
At the same time, the Crown Prosecution Service and Serious Fraud Office have updated their joint Corporate Prosecutions Guidance, which also reflects the broader reforms to corporate liability already in effect, including the expanded “senior manager” attribution test for economic crime.
For organisations that are still finalising their compliance programmes, the coming days, weeks and months provide an opportunity to confirm whether they are in scope as a large organisation, identify associated persons, and update fraud risk assessments and due diligence and other fraud prevention procedures.
Such procedures should be designed, implemented and evidenced against the government’s six principles, with training, reporting channels and investigation protocols reviewed to ensure that escalation routes take into account self-reporting and potential engagement with the SFO under its Deferred Prosecution Agreement framework. Supply chains and third-party arrangements may also require attention where intermediaries or service providers present higher risks.
Seladore provides independent advice to corporates on the design and testing of reasonable procedures and on responding to incidents in a way that mitigates both litigation and regulatory risk.
For a pragmatic readiness review, please contact Dan Hudson.
Seladore’s previous briefing on this topic can be read here.