UK: LAW COMMISSION PROPOSALS TO MAKE DIRECTORS MORE ACCOUNTABLE FOR ECONOMIC CRIMES CONDEMNED AS A “THUNDERING DISAPPOINTMENT”

On 10 June, the Guardian reported that MPs from the all-party parliamentary group on anti-corruption and responsible tax criticised the proposals as “unambitious, uninspired and insipid”, and saying the Law Commission had excluded essential changes that would have made it easier to punish companies and directors for failing to prevent money laundering.  The Commission’s role is to recommend updates to the law, ensuring that it remains fair, modern and simple. The review will now be passed to Government, which will decide which, if any, of the recommendations will be adopted.

https://www.theguardian.com/business/2022/jun/10/anti-money-laundering-proposals-uninspired-insipid-mps-law-commission-review-corporate-criminal-liability

The Law Commission says that options for reform to corporate criminal liability include widening the scope for attributing liability to corporations for the conduct of senior management – which would reform the established, and problematical, “identification doctrine”.  The report also contains the option of extending “failure to prevent” offences so that they capture other economic crimes by corporations, including an offence of “failure to prevent fraud”.  This would cover a situation in which the company has failed to put measures in place to prevent their own employees or agents committing fraud for the benefit of the company.  New financial penalties and reporting requirements for corporations are also presented as possible reform measures.

https://www.lawcom.gov.uk/law-commission-sets-out-options-to-government-for-reforming-how-companies-are-convicted-of-criminal-offences/

 

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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