A new corporate offence called “failure to prevent fraud” came into force on Monday 1 September, putting large organisations squarely in the crosshairs of prosecutors. Under the law, companies can be held criminally liable if they profit from fraudulent activity committed by anyone connected to the business.
If charged, the burden will be on the organisation to prove it had “reasonable” anti-fraud procedures in place. The offence applies to businesses meeting at least two of three criteria: having more than 250 employees, turnover above 36m or assets of at least 18m.
This comes at a time when geopolitical tensions, market volatility and the rapid pace of technological advancement threaten to elevate behavioural risk inside organisations. Indeed, fraud rose 31% last year to its highest level since 2017, according to the Office for National Statistics.
Failure to comply with the new law could mean unlimited fines, long-lasting reputational damage and criminal investigation by the Serious Fraud Office (SFO) or Crown Prosecution Service (CPS) – highlighting the urgency for boards to take swift action.
Companies without robust reporting channels risk being blindsided, potentially first learning of misconduct only when investigators arrive. While whistleblowing systems are not mandatory for every business, they are fast becoming a cornerstone of credible fraud, bribery and tax evasion prevention.
“Fraud differs from bribery or tax evasion in that...
Victoria’s Essential Services Commission (ESC), the state’s main regulator, says it has suspended another business from the Victorian Energy Upgrades (VEU) program after alleged false claims. The ...