New proposals will see companies prosecuted for fraud and money laundering

Companies face the risk of prosecution for failing to prevent white collar crimes such as fraud and money laundering, under new government proposals.

The recently appointed attorney general, Jeremy Wight, confirmed this week that proposals were being assessed to widen criminal liability for the corporate world.

At the Cambridge Symposium on economic crime this week, Wright said: "The evolving nature of economic crime means we need to continue to find and develop new ways to expose and combat it. The government is considering proposals for the creation of an offence of a corporate failure to prevent economic crime."

Wright added that the government would soon publish its first anti-corruption plan. At present, companies can be prosecuted for failing to prevent bribery and fined an unlimited amount under the Bribery Act 2011.

Barry Vitou, a partner at Pinsent Masons, observed: "Business should not bury its head in the sand. A new criminal offence of failure to prevent fraud is coming. The change will represent a seismic change in corporate criminal liability. The proposal has cross-party support and is now being pushed onto the government agenda in the wake of high profile scandals and overwhelming public appetite for corporate and white collar accountability."

New rules, expected to come into force in October, will already see companies fined as much as 400 per cent on any profits accrued through bribery.

Vitou added: "The government and the Serious Fraud Office are ramping up the pressure on companies to disclose any wrongdoing. It's clear that businesses that do not invest in preventing white collar crime will be most at risk. From October, the UK will also have some of the toughest fines in the world for companies breaking bribery laws."

Lawyers have also been warned that they may face investigation for 'enabling' organised crime with their services.

Donald Toon, director of the economic crime command at the UK's National Crime Agency, commented: "We are seeing that the provision of money laundering is a service to large-scale criminality. That criminality extends to a range of different types: the proceeds of major corruption [or] the proceeds of unjust enrichment by problem regimes."