The corporate world can be a ‘double-edged sword’. On the one hand, there are a number of different ways in which commerce is conducted, meaning that opportunities to conduct business are available and varied like never before. Conversely, due to the wide variety of financial instruments available, markets are susceptible to criminal activity by way of a multitude of sophisticated methods.

In this article, we discuss the recent legislation and regulations enacted and updated in order to combat the ever-rising threat of white-collar crime.

The law

The UK has increased its efforts to tackle economic criminal activity and white-collar crime. There have been a range of major legal updates in recent years, all with the aim of placing responsibility on the shoulders of companies with regard to their exposure to white-collar criminal activity and regulatory breaches. The normal routes of vicarious liability or the identification principle have been greatly enhanced in recent years with a growing number of specific corporate offences.

The Criminal Finances Act 2017 is a relatively new piece of legislation, implemented in autumn 2017. The Act prescribes two new offences: the failure to prevent the facilitation of UK tax evasion (the UK offence) and the failure to prevent facilitation of foreign tax evasion (the foreign offence). In order to be liable, an associated person of the business (relevant body) facilitates UK or non-UK tax evasion. The business must then fail to prevent its representative from committing the criminal activity. The only defence available to the business is to show that it had reasonable prevention methods in place or it was not reasonable to have such prevention methods in place under the circumstances.

Jul-Sep 2018 Issue