Bribery, fraud and anti-money laundering | UK Regulatory Outlook January 2025

Failure to prevent fraud

As previously reported, the government has now published the statutory guidance on failure to prevent fraud offence, introduced in the Economic Crime and Corporate Transparency Act (ECCTA) 2023.

Relevant organisations should now use the implementation period to review existing fraud prevention measures, update risk assessments and training, to ensure they have reasonable procedures in place to prevent fraud before the offence comes into force on 1 September 2025.

For further information, see our Insight and register for our upcoming "Future of Financial Services Week" webinar, where our experts will discuss the recent AML consultations, the failure to prevent fraud guidance and what we can expect going forward.

FCA consultation on publicising enforcement investigations

The Financial Conduct Authority (FCA) published Consultation Paper 24/2, Part 2: Greater transparency of our enforcement investigations, the second part of its consultation on proposals to update the agency's approach to enforcement investigations.

In February 2024, the FCA consulted on its proposals make amendments to streamline its enforcement process, including announcing investigations as they start, or while they are ongoing, where it is "in the public interest" to do so. 

The FCA has now launched a further consultation after the industry raised concerns in response to its original proposals (see Osborne Clarke's response to the consultation), with the following four "significant changes":

• The impact of an announcement on the relevant firm will now form part of its public interest test and be central to the FCA's consideration of whether to announce an investigation and name a firm.
• The potential for an announcement to seriously disrupt public confidence in the financial system or market will be an additional factor in the public interest test.
• Firms will be given ten business days' notice before an announcement is made to make representations and decide whether to make an announcement themselves, with a further two days' notice if the FCA decides to make an announcement.
• The FCA will not make announcements of investigations that are ongoing when the proposals come into effect, although it may confirm where investigations are ongoing which are already in the public domain and in the public interest.

The consultation closes on 17 February 2025. The board expects to come to a decision on the proposals in the first quarter of 2025.

Increased funding for SFO in crackdown on fraud

Following the Autumn Budget 2024, the government announced that the Serious Fraud Office (SFO) will receive an additional £9.3 million of funding to support the SFO's role in tackling complex cases of corporate fraud, bribery and corruption.

The additional funding will be used to create a new asset confiscation enforcement team and provide upgrades to the SFO's disclosure technology and case management system.

Nick Ephgrave, director of the SFO said: "I welcome the continuing support for the SFO’s strategic ambitions, as we seek to deliver swifter justice for victims of complex economic crime. This investment will strengthen our capacity to recover criminal assets, manage our cases, and help us further explore machine learning technology to tackle the huge disclosure exercises on our cases."