The government has published ‘Corporate Liability for Economic Crime Call for Evidence: Government Response’, three years after the original consultation ended. 

The report concluded that it was "unable to draw decisive conclusions regarding whether, and how, our approach to corporate liability for economic crimes can be strengthened”. It has appointed the Law Commission to undertake a detailed review on providing a practical and considered route to law reform.

The call for evidence was concerned with criminal offences designed to punish and prevent economic crimes such as fraud, false accounting and money laundering when committed on behalf or in the name of companies. It was launched in January 2017 and ran for three months until the end of March 2017. 

It focused in particular on the extent to which the common law ‘identification doctrine’ is deficient, particularly in the context of prosecutions against large modern companies.

Identification doctrine is the test for attributing fault to a corporate body where it can be shown that an individual in the corporate had the ‘directing mind or will’ behind an offence.

The evidence submitted to the Call for Evidence was considered inconclusive by government, as it had produced no new significant examples that clearly illustrated the extent of the reported problems with economic crime law and the identification doctrine. The government submitted that legislation already on the books had overtaken many of the concerns in the Call for Evidence.

  • The Bribery Act 2010 has "already had a significant impact on corporate culture".
  • The Proceeds of Crime Act 2002 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 tackled issues in relation to Anti-Money Laundering.
  • The Criminal Finances Act 2017 introduced two new failure to prevent offences in respect of the facilitation of UK and foreign tax evasion offences.

The government concluded it is not appropriate to proceed with immediate legislative reform. It has appointed the Law Commission to provide a practical and considered route to law reform. It is currently estimated that the Law Commission’s scoping work will take between 12 and 15 months and be run as a cross-team collaboration by the Criminal Law and Commercial & Common Law Commissioners. 

Links

AML: Anti-Money Laundering Procedures and Checks
A subscriber guide to Anti-Money Laundering (AML) procedures and checks, including what factors to consider when taking on a new client and conducting your 'know your client' procedures.

External links

Corporate Liability for Economic Crime Call for Evidence: Government Response

 

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