UK seeks tougher corporate financial laws

Prosecutors have pressed the govt to widen corporate liability laws, where companies are more directly responsible for workers’ actions

by BLOOMBERG

LONDONA proposal to toughen UK laws to make it easier to hold companies accountable for financial crime is still under consideration by the government after years of back and forth, according to a speech from the solicitor general.

“The weaknesses in our current law result in other jurisdictions holding British companies to account when ours has not,” Robert Buckland said yesterday at a conference in Cambridge, England. “The government completed its call for evidence on corporate criminal liability” laws and is now considering the submissions.

Buckland’s comments at the Cambridge International Symposium on Economic Crime come one year after the attorney general told the same conference the government had resurrected a proposal to make it an offence for companies to fail to prevent economic crimes such as fraud and money laundering. The move marked a U-turn from a year earlier when the government abandoned the initiative, claiming there was “little evidence of corporate economic wrongdoing going unpunished”.

Prosecutors and anti-corruption lobbyists have pressed the government to widen UK corporate liability laws to make them more akin to the US, where companies are more directly responsible for workers’ actions. Under current UK laws, a company can only be charged if prosecutors can demonstrate senior executives — or the so-called controlling mind — of a company were involved.

The change would give law enforcement agencies a more complete suite of powers after the UK made companies responsible for failing to prevent bribery in 2011, and a new criminal offence of corporate failure to prevent tax evasion is about to come into force.

“Our current system of limited corporate liability incentivises a company’s board to distance itself from the company’s operations,” Buckland told the audience of global prosecutors and defence lawyers. This “has made it difficult to attribute criminal liability to large corporations”.

Buckland praised the work of the Crown Prosecution Service and Serious Fraud Office (SFO), which he oversees, citing the SFO’s recent charges against Barclays plc and four of its former executives as an example of the UK response to allegations of economic crime.

“It is surely right that the UK should lead enforcement in relation to UK companies” and companies with business here, SFO director David Green said. “If we take our foot off the pedal in relation to corporate crime and commercial bribery others will fill the void.” — Bloomberg

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