Companies could be prosecuted for enabling economic crime
18th Sep 2014
A new government proposal could put companies at risk of being investigated and prosecuted for ‘enabling’ organised crime.
Jeremy Wright, the recently appointed attorney general, has confirmed that the government is looking into proposals that would increase liability for criminal action in the corporate world.
The new proposals could mean prosecution for failing to prevent crimes such as fraud and money-laundering – currently, companies can be prosecuted for failing to prevent bribery under the Bribery Act 2011, and can be fined an unlimited amount.
Wright states that the ‘evolving nature of economic crime’ means the government must keep looking for ways of fighting against it, which means finding and punishing those responsible. He adds that the first anti-corruption plan will soon be published by the government, which will outline how various bodies that investigate corruption offences can work better together.
Already new rules being introduced in October will see companies fined for any profits accrued through bribery, up to as much as 400%. This will mean that the UK has ‘some of the toughest fines in the world’ for companies that break bribery law, according to Barry Vitou.
Vitou, a partner at Pinsent Masons and expert adviser on corporate corruption, notes that this proposal would represent a ‘seismic change in corporate criminal liability’. Well-known scandals combined with public demand that firms committing corporate crime are held accountable for their actions mean that such a proposal, which has ‘cross-party support’, is now being forced on to the government’s agenda.
He adds that the government and the Serious Fraud Office are already working to increase pressure on companies to confess any ‘white collar crimes’ they may have committed, and that businesses who do not invest in preventing such crime will suffer most.
Lawyers have also been warned that they could fall under investigation for allowing organised crime within their services.