Corporate liability across borders: A multi-jurisdictional guide to Failure to Prevent Fraud Offences

Introduction 

In recent years, the regulatory efforts to combat fraud have grown immensely, though there is still a lack of consistency on a global scale.

An important recent development has occurred in the United Kingdom with the implementation of the Failure to Prevent Fraud Offence (UK FtPF), which seeks to hold companies liable for failure to prevent a specified fraud event from occurring, often making it easier to prosecute corporations for fraud.

The UK FtPF is part of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). It outlines the instances in which a company can be held accountable for fraud, including when: (i) an employee or agent commits the fraud; and (ii) the fraud is intended to benefit the organisation or a person to whom services are provided on behalf of the organisation. The UK FtPF also incorporates a defence of ‘reasonable procedures’ which organisations must review and implement into their existing anti-fraud systems, to avoid prosecution.

Further information on the UK FtPF can be found here.

Globally, there is increasing emphasis on the prevention of fraud, and the overarching concepts of the prevention of bribery and corruption, though many countries are yet to implement a formal legal framework. Certain regions such as the EU have certain regulations surrounding the matter, often non-criminal, with Member States developing them further. Outside of the EU, several countries have implemented some degree of regulation on the topic. Most notably Australia and South Africa.

This short guide explores whether jurisdictions have implemented offences similar to the UK FtPF. 

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