Summer days drifting away

In case you’re wondering why I was quiet last week, it’s because we went on holiday to Malta – never been before and it was just a coincidence that this story is raging there at the moment.  Honest.

Summer should be a time for relaxing and regrouping, but more and more often we are seeing really important, far-reaching consultations being issued over the summer months.  And this year is going to be no different, because in tandem with the recent anti-corruption summit in London, the UK’s Ministry of Justice issued a press release flagging up plans for another consultation: “The Ministry of Justice will consult on plans to extend the scope of the criminal offence of a corporate ‘failing to prevent’ beyond bribery and tax evasion to other economic crimes.  Police and other law enforcement agencies can struggle to prosecute corporations for money laundering, false accounting, and fraud under existing common laws.  The consultation will seek views and evidence to assess whether changes in the law could allow the courts to more effectively prosecute corporate economic crime.”  Justice Minister Dominic Raab revealed the timetable: “The consultation, published this summer, will explore whether the ‘failure to prevent’ model should be extended to complement existing legal and regulatory frameworks.”

So what other “economic crime” could be included?  I’m guessing fraud, embezzlement, theft, forgery, false accounting…  Corruption and money laundering – or prevention thereof, through the application of appropriate policies and procedures – are already covered elsewhere.  A proposal for a new corporate offence of failure to prevent the facilitation of tax evasion is already gaining traction.  And this, I should imagine, will be the model: section 7 of the Bribery Act 2010.  If it is, we can expect the new legislation to have extra-territorial reach – as the Bribery Act has it, applying to any body corporate or partnership either incorporated/formed in the UK or incorporated/formed elsewhere but “which carries on a business, or part of a business, in any part of the United Kingdom” – and to cover “associated persons” (e.g. employees, agents, contractors, joint venture partners).  If the Bribery Act is indeed used as a model, those affected will need to arm themselves with “adequate procedures” to prevent economic crime in order to have a defence against the offence.

It’s quite a step, this one, so you might want to pack your consultation response kit (laptop, legislation and paracetamol) along with the suntan cream.

This entry was posted in Legislation, Money laundering, Organised crime and tagged , , , , , , , , , . Bookmark the permalink.

2 Responses to Summer days drifting away

  1. erskinomics says:

    Welcome back from holidays! I think “failure to prevent the facilitation of tax evasion” would be a terrific AML offense, extended to taxpayers’ bankers, accountants and lawyers. No time for holidays when that overdue change is made!

  2. Well, Erskinomics, I think it’s on its way – although we’re in “purdah” here in the UK until after the Brexit referendum, so the government is not doing anything else at all, which is painful for those of us waiting for, for example, draft AML legislation reflecting MLD4.
    Best wishes from Susan

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