Latest news with #ECCTA
Scotsman
3 days ago
- Business
- Scotsman
The Serious Fraud Office is on the warpath, so be prepared
The most significant reform of corporate criminal law since the 2010 Bribery Act is just weeks away, writes David Lister Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... With less than a month until the Economic Crime and Corporate Transparency Act (ECCTA) 2023 'failure to prevent fraud' offence comes into effect, large organisation should ensure that proper preparation is under way to meet their legal obligations. Failure to prevent fraud by 'associated persons' is a new corporate criminal offence under the ECCTA which will apply from 1 September. Advertisement Hide Ad Advertisement Hide Ad This is the most significant reform of corporate criminal law since the Bribery Act 2010, and it greatly increases the risk of corporate criminal liability for frauds which benefit an organisation or an organisation's clients. Failure to prevent fraud by 'associated persons' is a criminal offence from September 1 (Picture: With the head of the Serious Fraud Office, Nicholas Ephgrave, recently stating the agency is keen to prosecute the new offence and that 'someone needs to feel the bite', time is of the essence. There is a 'reasonable procedures' defence. To have a prospect of having a defence, the government guidance stipulates that a documented fraud risk assessment is essential. Large organisations and their subsidiaries should also ensure that current policies cover the failure to prevent fraud offence and are effectively communicated throughout the organisation. The offence aims to hold large organisations accountable for frauds by subsidiaries, employees, agents and other 'associated persons' where there is an intention to benefit the organisation or the organisation's clients. In addition, smaller subsidiaries which are part of large corporate groups are also caught where there is a failure to prevent an outward fraud by an employee. Advertisement Hide Ad Advertisement Hide Ad An organisation is 'large' if it meets two or more of the following criteria in a financial year: turnover of more than £36 million; a balance sheet total of more than £18m; and more than 250 employees. For parent companies, the aggregate global figures of all subsidiaries apply. David Lister, Partner and Forensic Accountant at Pinsent Masons Organisations should already be working towards this deadline, as there is no formal grace period written into the legislation. The government has provided advanced notice of the start date as well as guidance on the steps organisations should put in place to discharge the reasonable procedures defence. The current guidance is somewhat broad and not prescriptive, allowing organisations the flexibility to tailor their fraud prevention measures to their specific needs. Organisations will need to assess whether or not there are already reasonable procedures in place or, if not, make the necessary changes. This can be carried out via a 'current state' assessment of the fraud risk management framework. The new corporate criminal offence is the most significant boost to the ability of the Serious Fraud Office, the police and other law enforcement bodies to investigate and prosecute serious economic crime in more than a decade. Advertisement Hide Ad Advertisement Hide Ad Nicholas Ephgrave recently emphasised his enforcement agency's 'hunger' to prosecute large organisations. He said: 'Come September, if they haven't sorted themselves out, we're coming after them. That's the message I'll be delivering. I'm very, very keen to prosecute someone for that offence. We can't sit with the statute books gathering dust, someone needs to feel the bite.'
Yahoo
29-07-2025
- Business
- Yahoo
UK companies lag in ECCTA compliance readiness
A study by Vistra has disclosed that a mere 28% of UK directors are prepared for the Economic Crime and Corporate Transparency Act (ECCTA), with the smallest companies being the least prepared and none confirming readiness. The ECCTA mandates identity verification for all directors, persons of significant control (PSCs) and company filers by autumn 2025, yet less than 3% have complied so far. The ECCTA represents the most substantial reform to the UK's Companies House since 1844, introducing stringent requirements for identity verification and a new offence for failing to prevent fraud. Despite the impending changes and the risk of unlimited fines, Vistra's survey of 100 UK company directors reveals that 39% are unaware of the ECCTA deadlines. The act's enforcement could lead to disqualification of company officers and prohibit companies from filing documents or engaging in acquisitions. Larger practices demonstrated a greater degree of preparedness, with 37% indicating they are very prepared and 49% expressing confidence in their processes to meet the 'reasonable procedures' requirement of the new offence. However, the sentiment among companies is that the ECCTA is burdensome, with 58% holding this view and only 23% disagreeing. Vistra global director of entity management solutions Meg Ogunsola warns that many businesses are underestimating the ECCTA's scale and urgency. Ogunsola advises that acting early is crucial to avoid bottlenecks and severe financial penalties. She notes that Companies House will adopt a strict stance against non-compliant businesses and highlights the need for alternative solutions for overseas directors and those reliant on paper documents. 'Given the scale of the reforms and the administrative burden, it is no surprise that we are seeing many organisations seek specialist support to ensure they meet their obligations efficiently and effectively,' Ogunsola said. "UK companies lag in ECCTA compliance readiness" was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
08-07-2025
- Business
- Yahoo
UK reversal of Companies House reforms may affect SMEs
The UK government is considering a reversal of the planned Companies House reforms that would have required small businesses (SMEs) to file accounts using compliant software by 1 April 2027. This sudden policy shift is likely to impact SMEs' accounting practices. This shift has been acknowledged by Meg Ogunsola, global director of Entity Management Solutions at Vistra, as a significant reminder of the difficulties in implementing new regulations that are both practical and protective for businesses. Ogunsola emphasises the importance of smaller firms working with knowledgeable partners to manage the uncertainty of evolving regulations and maintain compliance without undue hardship. Despite the potential reversal, she supports the measures under the Economic Crime and Corporate Transparency Act (ECCTA). She also cautions businesses to prepare for the mandatory ID verification for directors, PSCs, and LLP members, which is expected to be enforced this autumn. Meg Ogunsola said: "The Government's potential U-turn on Companies House reforms for filing rules highlights the complexity of drafting and introducing regulations, and the tricky balancing act of protecting and overburdening firms. These complexities demonstrate the need for companies, particularly smaller ones, to partner with suppliers that can help them navigate regulatory uncertainty, reduce operational strain, and support compliance.' She added: "Despite this change, the ECCTA remains critical in the UK's fight against fraud, and with mandatory ID verification coming into force this autumn, businesses must act now to ensure they are prepared." "UK reversal of Companies House reforms may affect SMEs" was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Focus Malaysia
26-06-2025
- Business
- Focus Malaysia
UK corporate crime reforms: Lessons for Malaysia
AS global scrutiny of corporate wrongdoing intensifies, governments are being pressed to close gaps in legal frameworks that allow powerful organisations to escape accountability. The United Kingdom's (UK) proposed Crime and Policing Bill 2025, which builds on the Economic Crime and Corporate Transparency Act 2023 (ECCTA), signals a fundamental shift in how corporate criminal liability is approached. For Malaysia, grappling with recurring corporate scandals and persistent enforcement gaps these developments offer a timely lesson in legal reform. The UK's current reforms break from its traditionally narrow 'identification principle', under which corporate criminal liability hinged on proving that the directing mind and will (typically, board-level executives) possessed the necessary criminal intent. This model had long struggled to hold large, complex corporations accountable, as misconduct often occurred several layers below board level. The result was a form of de facto immunity for major corporations an issue Malaysia knows too well from high-profile cases like 1MDB. The ECCTA, along with the proposed Crime and Policing Bill, challenges and reshapes the existing status quo. The UK is introducing a broader 'senior manager' test that attributes liability to a corporate entity if a senior manager, acting within their actual or apparent authority, commits an offence. Initially limited to economic crimes such as fraud and bribery, the new Bill proposes to expand this principle to all criminal offences, including environmental breaches, health and safety violations, and potentially even regulatory offences under data protection or competition law. Should Malaysia give serious consideration to this matter? The relevance for Malaysia Malaysia has made progress in recent years with frameworks like the corporate liability provision under Section 17A of the Malaysian Anti-Corruption Commission Act 2009, which imposes liability on companies for bribery committed by associated persons. But unlike the UK's evolving regime, Malaysia's framework remains limited in scope. It does not yet offer a comprehensive system that attributes liability to senior individuals beyond bribery, nor does it extend to a broader array of corporate misconduct. In an era where corporate actors are transnational, crimes like money laundering, tax evasion, and environmental damage frequently cut across jurisdictions. Yet Malaysia's legal system lacks the robust extraterritorial reach that both ECCTA and the proposed UK Bill provide. The UK reforms allow for corporate liability even where only part of the conduct occurs in the UK, or where the victim is a UK national. Malaysia must adopt a similarly outward-facing approach, particularly given the global footprint of its GLCs, listed companies, and state-linked institutions. Why reform is crucial now First, Malaysia is at a credibility crossroads. Although enforcement agencies have made strides in tackling corruption and economic crime, public confidence in institutional accountability remains fragile. Legal reform that closes loopholes in corporate criminal liability can help restore faith in the system and signal a genuine commitment to good governance. Second, the global enforcement landscape is shifting. The creation of a new taskforce involving the UK, France, and Switzerland aimed at prosecuting international financial crime shows that enforcement is becoming more collaborative and less tolerant of inaction. The US, traditionally a leader in anti-corruption enforcement via the Foreign Corrupt Practices Act, has slowed enforcement. This vacuum is being filled by European actors. Malaysia, a regional economic hub, risks reputational harm and legal isolation if it does not modernise its approach. Third, as ESG (environmental, social and governance) accountability becomes mainstream, companies are being judged not just by profitability but by compliance and integrity. A modern liability regime that deters wrongdoing by making corporations answerable for the actions of their senior personnel aligns with this global shift. This is especially pertinent given Malaysia's reliance on natural resources, extractive industries, and a growing digital economy sector where regulatory breaches can have far-reaching effects. Key takeaways for Malaysian reform Malaysia should consider key corporate liability reforms, drawing from the UK's legal framework. First, the basis of liability should be broadened beyond bribery to encompass all serious economic crimes, environmental offences, and regulatory breaches, ensuring comprehensive accountability. A 'Senior Manager' test should also be introduced, holding companies liable for misconduct by individuals with significant decision-making authority, even if they are not board members. Additionally, the scope of authority must be clarified to include 'apparent authority,' preventing firms from denying liability for criminal acts carried out in role-relevant contexts. Malaysia should also enhance the extraterritorial application of its laws, enabling prosecution of offences that affect Malaysian interests, even when elements occur abroad. Finally, to foster a culture of prevention, Malaysia could adopt a mechanism similar to the UK's Deferred Prosecution Agreement regime, which encourages companies to implement robust compliance programs and self-report misconduct in exchange for more flexible enforcement. These reforms would significantly strengthen corporate accountability and regulatory integrity. ‒ June 26, 2025 R. Paneir Selvam is the principal consultant of Arunachala Research & Consultancy Sdn Bhd, a think tank specialising in strategic national and geopolitical matters. The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia. Main image: Shutterstock
Business News Wales
23-06-2025
- Business
- Business News Wales
Companies House Celebrates 10 Years of Open Data
The commitment to open data was designed to improve corporate transparency and give entrepreneurs the opportunity to come up with innovative ways of using information on the register, said Companies House. In the last 10 years, the appetite for Companies House data has grown more than tenfold. The register was accessed 1.3 billion times for free information in 2015/16. By 2023/24, it was accessed over 16.5 billion times. Companies House data is widely used by companies, creditors, investors and researchers, credit reference agencies and providers of financial information. It's also a trusted source for journalists and civil society, government, law enforcement and the public. Companies House data is empowering businesses, easing commerce through the sharing of data, strengthening the fight against financial crime through accountability and helping businesses verify customers, and customers verify businesses, Companies House said. Companies House Chief Data Officer, Charlie Boundy, said: 'In 2015 we broke new ground for corporate registers with our commitment to open data. Ten years later that bold decision has led to Companies House supporting 16 billion searches a year, underpinning millions of pounds of everyday financial decisions and our data being valued by industry at £1-3 billion annually. Now, Companies House is implementing changes to company law under the Economic Crime and Corporate Transparency Act (ECCTA) to improve the integrity and accuracy of data on our register. This will make it even more valuable to users and further support economic growth.' Competition and Markets Minister Justin Madders said: 'Over the last 10 years increased transparency from Companies House has empowered businesses big and small, helping level the playing field and improving confidence in our economy. As part of our Plan for Change we'll continue to build on this success, strengthening transparency to give companies and consumers more certainty about the businesses they work with.' Ben Cowdock, Senior Investigations Lead, Transparency International said: 'For 10 years, the online platform at Companies House has delivered world-leading corporate transparency, setting an example for the best way to make company information available to the public. The data on this platform has contributed to countless investigations into corruption and financial crime by law enforcement, the private sector and civil society alike, and makes the UK a safer place to do business. We at Transparency International UK use the Companies House service on a daily basis, with the data providing a cornerstone to our research and investigations. We look forward to many more years of using the platform and working with Companies House to ensure it remains a world-leading service for those seeking company information.' Steve Lamb, Chief Operating Officer at Kyckr, said: 'The launch of the Companies House open data service in 2015 marked a profound leap forward for corporate transparency in the UK. By making company information freely accessible to all, Companies House democratised access to one of the world's most important datasets, enabling commerce, driving accountability, and strengthening the global fight against financial crime. At Kyckr, we've seen firsthand how open and authoritative registry data can transform the way businesses verify customers and combat illicit activity. Given the UK's enduring position as an international financial hub, the move by Companies House set a powerful precedent – one that continues, rightly, to be celebrated.' Companies House data is estimated to be worth £1 billion to £3 billion per year to users. For anti-money laundering (AML)-regulated businesses, research published in 2024 suggests the value of company register information is £170-460 million per year in total. ECCTA reforms are expected to add between £210-400 million in extra value. Much of this is attributed to the introduction of mandatory identity verification for company directors from this autumn.
