How does ECCTA build on the UK Bribery Act? And what does it mean for corporates?

There are changes coming to the way corporate liability is structured. Is your organisation ready? The Economic Crime and Corporate Transparency Act (ECCTA), comes into effect in September. It builds on the changes made to the liability for failure to prevent fraud made in the Bribery Act in 2010.

Before the Bribery Act, there was a high bar to holding a company criminally liable. It often required proving that senior management was personally involved. 2010 saw the introduction of ‘failure of a commercial organisation to prevent bribery’. This meant a company could be held criminally liable for bribery committed by an employee or agent unless it could prove it had adequate procedures in place to prevent it.

The ECCT Act now builds on this logic: from bribes to fraud. It broadens the UK’s approach from anti-bribery to include wider economic crimes. In September ECCTA’s ‘failure to prevent fraud’ measure comes into effect, making it easier for prosecutors to hold large corporate entities responsible. This new offence applies to large organisations and holds them liable for fraud committed by “associated persons” unless they had reasonable procedures to prevent it.

So corporates need to show joined-up governance. They need to show that they have strong, preventative controls to tackle bribery, fraud and other risks, within their compliance strategy. Bribery and fraud now sit side by side under a common framework of prevent or be liable. Fragmented controls, siloed compliance programmes, or passive reporting lines will no longer stand up to scrutiny.

This is part of the continuing trend of corporate transparency and liability. The UK’s anti-bribery Act was followed by the Criminal Finance Act, which introduced a ‘failure to prevent the facilitation of tax evasion’ in 2017. In France a year before, the Sapin II law also introduced corporate liability for corruption. 

These new measures in the UK and France are a good illustration of the deliberate policy evolutions happening world wide. Now in the UK, ECCTA will come into effect in September, again using the ‘failure to prevent’ approach. On the investigation side, the Serious Fraud Office has recently announced it is stepping up its response and launching a proactive approach to hunting down fraud cases. 

Corporate compliance is now about prevention that works. The old, standard controls will no longer cut it. New technology is needed and geoficiency is already ahead of the game. It s technology is tried and tested on France’s strict anti-corruption law, Sapin II. Today, 20% of the CAC 40 use geoficiency technology (the equivalent of the UK’s FTSE 100).

A systemic compliance evolution is underway. Companies in regulated, international sectors need to seize this opportunity for change. ECCTA in the UK and Sapin II in France create legal exposure, but also a chance to use business ethics as a competitive advantage.

It started with the Bribery Act, but the UK is moving toward a compliance regime where governance, control, and data quality are inseparable. Companies can take advantage of this trend to commit to an enduring, ethical business culture and effective global compliance programme.

As the new measures take hold, controls technology remains the primary safeguard.