Economic Crime Act Exposure: What Companies Can Expect

In an article published by Law360, Hayley Ichilcik and Julius Handler discuss the UK’s Economic Crime and Corporate Transparency Act (the “Act”), which received royal assent on October 26, 2023. The Act is a “broad legislative package to prevent abuse of corporate structures and tackle economic crime,” and in particular reforms how corporate criminal liability is attributed and introduces a new “failure to prevent fraud” offence.

“The effect of the act is to attribute criminal liability to companies if a senior manager has committed a criminal offense from a long list in the act.     

“The act defines a senior manager as someone who plays a significant role in ‘the making of decisions about how the whole or a substantial part of the activities of the body corporate or (as the case may be) partnership are to be managed or organized, or the actual managing or organising of the whole or a substantial part of those activities.’

“Who constitutes a senior manager may well boil down to a question of substance, not form – a test that will require more than a plain reading of job titles.”

Read the full article.