The “failure to prevent fraud” provisions in the Economic Crime and Corporate Transparency Bill continue through parliamentary “ping pong”. On 11 September, the Lords again rejected the Government proposal to limit the offence to large organisations. As a compromise, the Lords proposes that the remit should be large and “non-micro” organisations. The Government maintains that anything including SMEs would be impracticable and unduly burdensome. It also maintains that any failure to prevent money laundering offence is “entirely duplicative” of existing requirements. The Lords, while disagreeing, decided not to press for this amendment, in favour of focussing on the fraud amendment. On that, it maintains that the Government had no issues with including all companies in the Bribery Act s7 offence or the CFA offence of failure to prevent facilitation of tax evasion so it makes no sense at all that it wishes to exempt most companies now.
The proposed definition of “non-micro organisation” is a body that, in the financial year preceding the year of the fraud offence, satisfied 2 of the following 3 conditions:
- turnover of more than £632,000 and less than £36m
- balance sheet total of more than £316,000 and less than £18m and
- more than 10 and less than 250 employees.
The Bill now returns to the Commons.