Horizon Scanning: Investigations and Enforcement

1. Failure to Prevent Fraud Offence in force

The new UK failure to prevent fraud (FTPF) offence came into force on 1 September 2025. The offence applies to organisations wherever they are located (including outside the UK) and so organisations will need to ensure that they have considered the applicability of the offence to their business on a global scale. The only defence to the FTPF offence is having in place “reasonable procedures” to prevent the relevant fraud offence. The SFO have been clear that there will be no easing in period and that it will be seeking to prosecute organisations for the offence as it has done successfully in relation to the Bribery Act 2010, under which regime the SFO has imposed almost £2 billion in penalties. The Director of the SFO recently commented that "Come September, if they haven’t sorted themselves out, we’re coming after them… I’m very, very keen to prosecute someone for that offence. We can’t sit with the statute books gathering dust, someone needs to feel the bite".

Organisations within scope need to be able to demonstrate that they have conducted a risk assessment tailored to this offence and considered their fraud policies and procedures in light of the risks identified. For more information on the short term and long term steps companies can take, please see our recent article here and a more detailed article here.

2. HMRC brings its first-ever prosecution for failure to prevent tax evasion

In August 2025, HMRC brought its first corporate prosecution under the Criminal Finances Act 2017 (CFA), charging Bennett Verby Ltd, a UK-based accountancy firm for allegedly failing to prevent the facilitation of tax evasion – nearly eight years after the legislation came into force. The charges follow a multi-year investigation and are believed to relate to allegedly fraudulent claims linked to research and development tax credits and pandemic-related loan schemes.

The CFA introduced two offences targeting corporate failure to prevent tax evasion facilitation which apply to companies, partnerships and other bodies corporate: one for UK tax and one for foreign tax with a UK connection. The offences impose strict liability where an associated person – which includes employees, agents and contractors – commits an offence by facilitating tax evasion. Liability does not depend on the knowledge or intent of senior management.

The Bennett Verby prosecution marks a significant shift in HMRC’s approach to corporate enforcement. Following criticism for its reluctance to prosecute under the CFA and the offence being labelled a “paper tiger” by parliamentarians, HMRC has now demonstrated its willingness to pursue charges against businesses that fail to prevent tax evasion. Businesses can no longer assume the legislation is dormant and enforcement activity is expected to increase. The decision to prosecute a mid-sized accountancy firm, rather than a large multinational, may reflect a strategic choice to establish legal precedent in a more contained case before moving on to larger, more complex targets.

On 11 September 2025, HMRC also published details of the number of live corporate criminal offences (CCOs) under investigation as of 30 June 2025. HMRC confirmed it had 11 live CCO investigations (remaining the same as the number reported in December 2024) and a further 27 ‘live opportunities’ under review; whilst 121 opportunities had been reviewed and rejected to date. The cases span 13 different business sectors, including legal services, accountancy and software providers.

These developments, together with the new UK FPTF offence signal a clear policy direction: authorities are moving toward stricter corporate accountability across multiple areas of economic crime.

To mount a successful defence under the CFA, organisations must be able to demonstrate that they had reasonable procedures in place. These must be proportionate to the risks faced, regularly reviewed, and properly documented. Generic or outdated policies are unlikely to be sufficient. Firms should ensure that their procedures are embedded in day-to-day operations, supported by training, oversight, and clear escalation routes. Given the new UK FTPF offence (which also covers offences of cheating the revenue) now is a good time to look at financial crime compliance procedures as a whole to ensure they are effective.

3. SFO issues cooperation guidance and prosecution guidance

In August 2025, the SFO (jointly with the Crown Prosecution Service) issued its updated corporate prosecution guidance for prosecutors and investigators; this follows from the issuing of the updated guidance for corporates issued in April 2025 of this year, which we have covered here.

The guidance sets out points that prosecutors and investigators should bear in mind when evidencing the various ‘failure to prevent’ offences.

Key points arising from the guidance include:

1. Associated Persons: An associated person in the context of failure to prevent offences is a broad term and encompasses anyone who performs services for or on behalf of the organisation. The guidance emphasises that there is no exhaustive list of associated persons and guides prosecutors and investigators to make this determination with (a) reference to the relevant laws; and (b) in light of the facts of the specific case that is being presented.
2. Prevention procedures: prosecutors and investigators are encouraged to refer to the government guidance setting out the six principles that organisations are expected to implement in order to maintain adequate / reasonable policies.
3. Failure to prevent fraud: in respect of the FTPF offence, the guidance reinforces that while organisations may face liability under this offence, they may in addition face prosecution for the underlying fraud.
4. Public interest: the guidance emphasised that prosecutors / investigators should consider whether there is sufficient public interest against prosecution and if this heavily outweighs the interests in prosecution. Various factors should be taken into account, but those which typically tend in favour of prosecution include whether there exists a history of similar conduct or where the organisation has been subject to sanctions or warnings for any unlawful conduct; if the conduct is part of the organisation’s established business practices; if the conduct took place when the organisation had an ineffective compliance programme; and failure to properly report the full and true extent of the wrongdoing.
5. Deferred Prosecution Agreements: the guidance makes a clear emphasis on the fact that charging decisions must be in line with the Code for Crown Prosecutors, and therefore prosecutors must remain alert to any attempts by organisations to withhold material that may frustrate an effective investigation or prosecution of individuals. This may weigh heavily in favour of prosecution of the organisation rather than resolution by DPA.

4. SFO sells property using Unexplained Wealth Order for first time

On 9 September, the SFO announced that it had used its first Unexplained Wealth Order (obtained in January 2025) to secure £1.1 million from the sale of a house belonging to the ex-wife of a convicted fraudster. The SFO have made it clear that they will continue to use enforcement tools such as UWOs to pursue assets and support their investigations.

5. The Home Office publishes a progress report on its "Economic Crime Plan 2"

On 2 September 2025, the Home Office published a progress report on the Economic Crime Plan 2 (ECP2), which was published in March 2023 and set out how public and private sectors would cut economic crime, protect national security and support the UK’s economic growth. The report demonstrates a shift towards data-led assessment of financial crime prevention and provides a summary of: (i) key insights from the priority outcomes and indicators being monitored as part of the ECP2 outcomes framework; and (ii) progress in developing new data to address limitations and improve the ability to comprehensively measure performance.

Some key insights include:

• An increase in conviction and prosecution rates for money laundering: In 2024, there were 6,845 prosecutions and 3,756 convictions for the combined number of principal and non-principal money laundering offences in England and Wales. This is a 36% increase in prosecutions and 7% increase in convictions from the previous year. Of the 3,756 convictions, money laundering was the principal offence for 1,036, a 10% increase on 2023.
• Contributions of Suspicious Activity Reports (SARs) to asset recovery: SARs assisted in asset denials totalling £230.4 million in the financial year ending 2023, representing 36% of the total value of assets denied in that financial year. The total value denied due to ‘Defence Against Money Laundering’ (DAML) requests in 2024 was £240.1 million, a 12% decrease on the previous year.
• An increase in fraud offences: The Crime Survey of England and Wales estimated there were 4.16 million fraud offences in the year ending March 2025, a 31% increase on the previous year.
• A decrease in financial sanctions breach cases: There were 396 recorded cases of financial sanctions breaches in 2024, a 16% decrease on the previous year.

Whilst data suggests there are positive indications of trends in how the system is performing, significant data gaps remain and further development is required to more directly measure outcomes. There are several examples of work underway to do this – for more information on this and the report more broadly, please see our recent article here.

The Home Office is planning on publishing an update to its report in the financial year ending 2027.

6. FCA drops 'name and shame' proposals

In June 2025, the FCA published an updated version of its Enforcement Guide (now to be known under the new acronym ENFG), which is now in force. It implemented the bulk of its proposed changes to streamline its enforcement guidance, although there were some areas where it decided not to take proposals forward or clarified the drafting which had been proposed in the consultation.

Notably, following significant industry feedback, the FCA dropped its original proposal to adopt a public interest test for publishing announcements naming firms when opening an enforcement investigation. Instead, the FCA has retained the "exceptional circumstances" test for announcing an investigation that was previously in place but has added three additional instances where announcements could be made. These will enable the FCA, in limited circumstances, to: (i) announce and name the subjects of investigations into suspected unauthorised activity or criminal offences related to unregulated activity; (ii) reactively confirm that it is investigating in specific circumstances; and (iii) share information on an anonymised basis.

Other key points from ENFG include confirmation of the FCA’s approach in connection with legal advisers at compelled interviews, sharing of privileged material and future consultation on the ENFG. Further details on these aspects of ENFG can be found in our briefing here.

7. Geopolitical changes

We expect geopolitical volatility to continue to influence enforcement activity internationally: while many countries are easing their sanctions on Syria, there is an international ramp-up of sanctions on Iran. The UK and the EU have also remained clear that relevant authorities do not intend to relax their enforcement and investigations activity insofar as Russia is concerned.

Meanwhile in the US, the Trump Administration left the future of the FCPA slightly unclear following budget cuts to the DOJ’s FCPA team in February, although it was clarified in June that anti-corruption enforcement would still very much be on the agenda for the DOJ where this would 'safeguard fair opportunities for US companies'. For more information see this article by our US team here.

The SFO has stated that it considers it is "business as usual" following the June 2025 FCPA announcement and was emphatic following a meeting with the DOJ in the summer noting that they were "strengthening their important partnership in tackling financial crime". As well as (continued) collaboration with the US, we expect to see an increase in cooperation with other authorities by the SFO, following the formation of the new International Anti-Corruption Prosecutorial Taskforce together with the Swiss Attorney General’s Office and the French Parquet National Financier (PNF). The SFO are clearly actively seeking new cases and considers that international partnerships will be key in that strategy.

More in-depth views on this development are discussed on our podcast episode in which we cover the future of anti-bribery enforcement and collaboration between the US and the UK here.

8. Solicitors Regulation Authority (SRA) and Law Society developments, including recent guidance for in-house solicitors

In November 2024, the SRA published a series of guidance notes for in-house solicitors, recognising the growth and importance of the in-house role and the unique pressures to which in-house solicitors can be subject. The guidance covers six topics and whilst it does not introduce any new standards or requirements, it aims to explain how the existing framework applies in particular in-house scenarios. The six topics covered are: identifying your client, reporting concerns about wrongdoing, internal investigations, legal professional privilege, guidance for employers on solicitors’ professional obligations and guidance for governing boards, chief executives and senior officers in organisations employing in-house solicitors (for further information, see our webinar and our briefings here and here).

More recently, as part of its professional ethics programme, in May 2025, the Law Society launched the first iteration of its ethical practice framework for in-house solicitors. The framework offers free tools, resources and templates to help the in-house community navigate ethical challenges in the workplace and represents the Law Society’s view of good practice in this area. It is intended to be complementary to the SRA’s guidance.

In terms of enforcement, the SRA is continuing development work on wider reforms to its financial penalties framework. In May 2025, it published an interim policy statement which includes discussion of, amongst other things, the changes it is making to its fining guidance in light of the Economic Crime and Corporate Transparency Act 2023, which removed the cap on the SRA’s fining powers in relation to certain breaches that involve economic crime.

We have seen the SRA continue to take action against those in the legal profession, with themes including breach of AML regulations, sexual misconduct and falsifying documents. The SRA has increased its fining activity, with fines most commonly imposed for breaches of anti-money laundering regulations. However, as of as of April 2025, unpaid fines came to more than £1m. The SRA has also reported that in 2024 a record 109 cases relating to sexual misconduct were opened, and that more complaints were made between 2023 and 2024 than in the previous four years combined. This trend has continued in 2025. As of September 2025, the SRA also has 95 high volume consumer claims cases, plus live investigations across 76 firms with potentially 200,000 plus claims between them, most commonly relating to financial products, housing disrepair and cavity wall insulation.

9. ESG update and supply chain liability

In Limbu v Dyson, the UK Court of Appeal found England to be the appropriate forum in a claim brought against Dyson for alleged forced labour practices of a Malaysian supplier. The Court of Appeal emphasised the primacy of the claim against Dyson UK, based on the fact that group policies were promulgated, implemented and overseen from the UK. The defendants’ application for permission to appeal against the Appeal Court decision was refused by the UK Supreme Court on 1 May 2025, and the matter will proceed to trial.

This case forms part of a growing number of claims brought against UK companies for alleged human rights harms caused by third parties in the corporate group or value chain, such as subsidiaries or suppliers. Further details can be found in our article here.

Separately, the UK government committed in its 2025 Trade Strategy to reviewing its approach to Responsible Business Conduct (RBC). This announcement followed a UK House of Lords Select Committee report which found that the UK has "fallen behind" on international legislative developments in this area. The UK Joint Committee on Human Rights has since published a report calling on the government to adopt mandatory human rights due diligence legislation and a forced labour import ban. See our briefing on these developments here.

10. Sanctions update

Sanctions continue to be imposed at pace across the UK, EU and the US.

In July, the EU introduced their latest (18th) package of sanctions against Russia and is currently exploring whether the impose further sanctions on Russian banks and energy companies in its continued efforts to combat the illicit trade of Russian oil. In the same month, the EU (and the UK) reduced the price cap on Russian oil from $60 a barrel to $47.60.

The UK is similarly focused on targeting sanctions circumvention in the energy and decentralised finance sectors: in August it imposed sanctions on entities enabling the "shadow fleet" of vessels carrying Russian oil and on crypto networks exploited by Russia. This follows the issue in July of joint FCDO-OFSI red alert on the shadow fleet sanctions evasion and avoidance network and an OFSI threat assessment of cryptoassets.

Russia is not the sole focus in the sanctions context: on 25 September, the US’s Office of Financial Assets Control (OFAC) designated arms trafficking networks and financial facilitators for North Korean weapons programmes.

Turning to Iran, in August OFAC imposed sanctions on Antonio Margaritis, his network of shipping companies and a number of vessels for the illicit transportation and sale of Iranian oil. The EU and the UK have similarly increased focus on Iran, this week imposing a "snap-back" of harsher sanctions regulations.

Enforcement remains a focus across the UK, EU and the US. In the UK, the Office of Financial Sanctions Implementation (OFSI) and His Majesty’s Revenue & Customs (HMRC) have both taken recent enforcement action, details of which are set out here.

OFAC have published details of a number of settlements this month, including:

• a $750,000 settlement with ShapeShift AG, a Swiss cryptocurrency exchange, for apparent violations of sanctions against Cuba, Iran, Sudan and Syria. ShapeShift did not screen its users against sanctions lists and had no formal compliance programme in place.
• a $1,610,775 settlement had been agreed with Fracht FWO (a freight-forwarder) for apparent violations of sanctions against Venezuela and Iran.