NEWS: UK ‘failure to prevent fraud’ offence comes into force today, September 1 - AML Intelligence

By PAUL O’DONOGHUE, Senior Correspondent

THE UK’s ‘failure to prevent fraud’ offence has come into force as of today, 1 September 2025, with companies warned they must abide by the rules.

The measure will hold companies to account “if they profit from fraud”, according to the UK government.

“large organisations can be held criminally liable where an employee, agent, subsidiary, or other ‘associated person’ commits a fraud intending to benefit the organisation,” it said.

Hiding important information from consumers or investors.

‘Dishonest’ practices in financial markets.

“In the event of prosecution, an organisation will now have to demonstrate to the court that it had reasonable fraud prevention measures in place at the time the fraud was committed,” the government said.

Analysts have said the offence marks a major shift in how the UK polices corporate fraud. This is because it removes the previous need to prove that senior management were complicit.

Colette Kelly, a regulatory specialist and partner at law firm Irwin Mitchell, said: “The new offence will have a significant impact on organisations and their risk exposure.”

The government said the offence is intended to “encourage organisations to build an anti-fraud culture”.

“[This is] in the same way that failure to prevent bribery legislation helped reshape corporate culture.”

Offence to prevent fraud in effect from September 1

The UK’s Serious Fraud Office (SFO) said the offence applies to organisations meeting two of the following criteria.

They have more than 250 employees.

A turnover exceeding £36 million

More than £18 million in total assets

“The offence covers fraud committed anywhere in the world that has a connection to the UK,” the SFO said.

The organization said it will “use these new powers” to investigate and prosecute “the most serious and complex fraud”.

Nick Ephgrave, director of the SFO, said the new law is a “significant tool for prosecutors”.

“Serious and complex fraud damages UK business and undermines our economy,” he said. “The SFO is ready to act if corporates fail to comply with their new responsibilities.”

Guidance for companies on how the offence will work is available [HERE].

Fraud is the most common crime type in the UK, the government said. It added that the offence “amounts to around 40% of all crime in England and Wales”.

“These new measures are part of a wider government ambition to reduce fraud and protect potential victims, including business victims.”

David Hanson, the UK’s fraud minister, said: “Fraud is a shameful crime. We are determined to bring those responsible to justice wherever it takes place.”