Any UK company can be found guilty of a secondary offence if it fails to prevent an “associated person” committing a primary offence, including overseas criminal conduct. In a nutshell, if your suppliers or contractors are evading tax, your business could be prosecuted and face unlimited fines by failing to prevent it.
On 10 June 2020, we were joined by Paul Marshall, Partner at Brodies LLP, who discussed corporate crime in the supply chain, the Failure to Prevent act and the increased risk of non-compliance during COVID-19 in our Risk and Compliance webinar.
25% of attendees were not familiar with the failure to prevent offence contained in the UK Bribery Act, and only 59% believe their organisation is ‘fairly prepared’ to comply with the failure to prevent requirements of the UK Criminal Finances Act.
Be aware and be prepared
When it comes to mitigating these risks, a staggering 47% of attendees revealed they have not read their supplier code of conduct, and two out of five do not have the preparations in place to comply with the failure to prevent requirements.
According to HMRC, there were 30 potential failure to prevent cases underway in February 2020, including 9 live investigations into companies of varying sizes and in multiple sectors.
Yet, organisations can avoid criminal liability if they can prove they have policies and procedures designed to prevent the primary offence occurring.
Understand the ‘failure to prevent’ offence and learn how to effectively mitigate the risk to your business by watching the webinar on demand.