New Corporate Money Laundering Offence

June 07, 2016

Dispute Resolution

New Corporate Money Laundering Offence

The Anti-Corruption Summit which took place on 12 May in London was, according to David Cameron, ‘the first of its kind and the biggest demonstration of the political will to address corruption that we have seen for many years’.

David Cameron has announced plans to launch a consultation on a new corporate offence of failing to prevent fraud or money laundering.

Although under section 7 of the Bribery Act 2010 it is an offence for corporate entities to prevent bribery and other economic crimes, such as money laundering or fraud, each have no equivalent prevent offence. Companies can only be prosecuted for these offences where commission of the offence can be attributed to someone who, at the material time, was the ‘directing mind and will’ of the company.

In April 2016, shortly after release of the Panama Papers, HM Revenue and Customs opened a consultation on a new corporate offence of failing to prevent tax evasion. For more information on this consultation, please click here:

While there are no further details of the proposals at present, it is widely thought that any resulting legislation is likely to mirror section 7 of the Bribery Act 2010, where a commercial organisation is guilty of an offence if a person associated with it bribes another, intending to obtain or retain business. In addition, such legislation is likely to contain an adequate procedures offence, where an organisation has a defence if it can demonstrate, on the balance of probability, that it had adequate procedures in place to prevent bribery.

In addition to the new offence, the Prime Minister has made the following announcements:

  • Creation of an International Anti-Corruption Coordination Centre to enable police and prosecutors to work together to pursue the corrupt across borders.
  • Creation of a Global Forum for Asset Recovery to enable governments and enforcement agencies to seize assets to return them to the countries from which they were stolen.
  • A consultation on Unexplained Wealth Orders to make it easier for UK agencies to seize property suspected of being purchased with illicit wealth, reversing the burden of proof in cases so that the owner must show that the legitimate funds were used in the purchase.

In relation to the proposed changes, David Cameron commented that ‘we will consult on extending the criminal “offence of failure to prevent” to other economic crimes….so that are properly held to account for criminal activity that takes place within them’

posted by Kate Garrow | June 07 2016