Economic Crime and Corporate Transparency Act: A Look at the UK and International Approaches for Financial Institution Liability and Failure to Prevent Fraud

C5 Fraud, Asset Tracing & Recovery Geneva, Hotel President Wilson

Louis Frédéric Muskens participated in a panel discussion on the new UK Economic Crime and Corporate Transparency Act (ECCTA).

This new act foresees two types of corporate criminal liability for fraud offences. Firstly, it allows for the attribution of senior managers' fraud offences to the corporation or partnership (Section 196) if they acted within the actual or apparent scope of their authority. Secondly, it establishes a new strict liability under Section 199 for large organisations where an associated person commits a fraud offence with the intent to benefit the organisation, whether directly or indirectly. The organisation can defend itself by proving that it had reasonable prevention procedures in place.

The panel discussed, among other things, the scope of application of the offence, its constituent elements, the reasonable prevention procedures, and a comparison with Swiss law on corporate liability.

The panel comprised Sophie Eyre (Bird & Bird), Paul G. Feldberg (Brown Rudnick), Mona Vaswani (Milbank), and Louis Frédéric Muskens (Bär & Karrer).