What does the Economic Crime and Corporate Transparency Act mean for the SFO?
January 15, 2024
Today another of the key provisions of the Economic Crime and Corporate Transparency Act (ECCTA) comes into force, with the extension of the Serious Fraud Office’s section 2A ‘pre-investigation’ powers. Below we look at what the changes mean for the SFO.
Section 2A powers
Our existing Section 2A powers allow us to obtain information from companies or individuals to support our intelligence work and to help determine whether to open an investigation. From today, we have these powers across every intel operation – including fraud.
This means we can now obtain data such as banking records before a formal investigation even begins, which will also allow us to restrain assets more quickly where we identify they could be at risk – helping to speed up the early investigative stage of our cases and better protect victims’ money.
Identification doctrine
How we prosecute companies has also changed. Until the ECCTA, prosecutors had to prove that a person identified as the “directing mind and will” of a company had committed an offence in order to prosecute it. This has been changed to “senior managers”, significantly broadening the scope for us to attribute criminal liability to a company. This reform came into force on 26th December 2023.
Failure to prevent fraud
The Act also introduces a failure to prevent fraud offence to hold organisations to account if they profit from fraud committed by their employees. All large businesses (defined by employee numbers, profits or turnover – and including subsidiaries that would be large if combined with their parent company) can be prosecuted under this offence, unless they can prove they had “reasonable” procedures in place to prevent fraud. This offence will come into force when accompanying Government guidance is published.
Crypto assets
Finally, the ECCTA will grant us new powers to freeze, seize and forfeit crypto assets. Criminals will be better prevented from concealing dirty money in crypto, ensuring they cannot retain the profits of their crimes. Ultimately, these new powers should result in more assets being recovered and more money returning to victims.
