The UK’s new corporate offence of failure to prevent fraud (FTPF), introduced on 1 September 2025 under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), marks a major shift in corporate accountability.
For the first time, large organisations can be held criminally liable for fraud committed by employees, agents, subsidiaries, or other associated parties—even if senior management had no involvement, claims Corlytics.
This strict liability approach mirrors the structure of the UK Bribery Act 2010 and reflects a growing global trend towards holding organisations responsible for their internal controls and cultural practices.
The legislation applies only to large organisations, defined as those meeting at least two out of three thresholds: more than 250 employees, annual turnover above £36m, or assets exceeding £18m. However, its reach extends far beyond UK borders. Any organisation with a UK connection—either through operations, victims, or financial activity—can fall within scope, even if headquartered abroad. With multinational firms increasingly exposed to cross-border risks, the introduction of FTPF has forced compliance teams to reassess their risk frameworks and internal processes.
A central feature of ECCTA is the reasonable procedures defence. Organisations can avoid liability by demonstrating that they had proportionate and effective procedures in place to prevent fraud, or that it would not have been reasonable to expect such procedures given the nature of their business. Government guidance centres on six principles: top-level commitment, risk assessment, proportionate controls, due diligence, communication and training, and ongoing monitoring. Recent updates from the Crown Prosecution Service (CPS) and the Serious Fraud Office (SFO) underline that enforcement is imminent, adding urgency for organisations to strengthen their control environments.
Against this backdrop, RegTech has become indispensable. Regulatory Change Management (RCM) solutions allow organisations to track legislative and regulatory developments, assess risks across markets, update policies, and maintain audit-ready documentation. With many large organisations operating across multiple jurisdictions, automation is increasingly essential to manage the complexity of overlapping compliance requirements. RegTech’s ability to streamline analysis, map requirements to internal policies, and ensure accountability makes it a critical component of modern fraud prevention.
While technology creates the infrastructure, workflows ensure that compliance actually happens in practice. Effective workflows set out clear responsibilities, approval stages, documentation requirements, and escalation paths. By digitising these processes, organisations can reduce manual workloads, limit errors, and embed consistency. RegTech platforms often integrate workflow tools that support role-based approvals, automated document creation, and cross-department integration across HR, legal, and finance. These capabilities make compliance operational rather than theoretical.
Audit trails sit at the heart of the reasonable procedures defence. In an environment where organisations must prove that they acted responsibly, having complete, tamper-proof, and time-stamped activity logs is essential. Modern RegTech platforms increasingly offer real-time audit functionality, providing instant visibility for compliance teams, strengthening internal investigations, and enabling early identification of suspicious behaviour. These features reinforce both accountability and transparency—two pillars of effective fraud prevention.
As enforcement begins, FTPF is shaping a new standard for corporate governance. Compliance can no longer be reactive or document-led; instead, organisations must demonstrate that fraud prevention is embedded into everyday operations. A resilient compliance ecosystem depends on three interconnected pillars: understanding the legal obligation, implementing operational workflows, and deploying technology that can automate and evidence compliance at scale.
Workflows and audit trails form the bridge between policy and practice. They ensure that prevention measures are enacted, recorded, and capable of standing up to regulatory scrutiny. Organisations that invest in technology-led compliance and robust evidence frameworks will not only reduce the risk of prosecution—they will build long-term trust with regulators, investors, and the public. The defining question in the age of FTPF is not simply whether organisations have procedures, but whether they can prove they work.
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