White-Collar Crime 2024 Comparisons

Unlike some other jurisdictions, there is no distinction in the criminal law of England and Wales between felonies, misdemeanours and other crimes. There are, however, distinctions between summary-only offences (which can only be tried in Magistrates’ Courts), indictable-only offences (which can only be tried by a judge and jury in the Crown Court) and either-way offences (which can be tried in either Court).

These distinctions are primarily relevant to the allocation of each prosecution to an appropriate tribunal and not to the fundamental nature of the offence – albeit more serious crimes, which carry higher maximum penalties, are generally tried on indictment. They can, however, have significant implications. For example, it is usually not possible to be found guilty of attempting to commit a summary-only offence.

Generally, an offence will require the commission of a prohibited act and the simultaneous presence of the necessary mental element. The specific elements of each offence will be determined either by the relevant statute or by established precedent (for a common law offence). The position in relation to the criminal liability of corporate entities is outlined in the following.

Although many offences require a mental element (eg, all offences of dishonesty), numerous offences are “strict liability”, requiring no mental element – eg, many road traffic offences. Another example is under Section 7 of the Bribery Act, which creates an offence of failure of a commercial organisation to prevent bribery. If a person associated with the corporate entity pays a bribe from which it benefits, then that entity is guilty of an offence irrespective of its knowledge of the bribe, unless it can prove that it had adequate procedures in place to prevent bribes by its employees or agents, or those associated with it.

In the event that the attempted offence is not completed, a person may be held liable for attempting to commit an offence. The applicable test is whether the act is more than merely preparatory to the commission of an offence. Indeed, English law makes it clear that a person can be guilty of an attempt even where committing the offence itself would have been impossible.

The test for the burden of proof is the same in white-collar cases as in every criminal case: the prosecution bears the burden of proof. The standard of proof is that the court must be sure, which replaced the former description “beyond reasonable doubt”. The term currently used is “satisfied so you are sure”, but the meaning is the same.

There is no general statute of limitations in relation to criminal liability in this jurisdiction. However, there are two important caveats. First, in the absence of a statutory exclusion for that offence, a Magistrates’ Court cannot hear a summary offence case unless the information has been laid (ie, proceedings initiated by the prosecutor) within six months of the commission of the offence. This means that for summary-only offences (ie, those which Parliament has deemed sufficiently minor that they can be tried only in a Magistrates’ Court and there is no right to elect trial by jury), in the absence of an exclusion clause, an automatic limitation period of six months applies.

Second, although there is no limitation period for offences that can only be tried in the Crown Court, whether or not the defendant chooses (or if the Magistrates consider that it is too serious for them to deal with), the Court retains the power under common law to stay (ie, stop) a prosecution if the delay gives rise to an abuse of process. This would only occur where the Court considered that the age/delay would make it either unfair to try the defendant at all, or where the delay was such that a fair trial would not be possible.

However, stays for delay are exceptional, and the courts regularly hear allegations that are decades old. Even where a delay is wholly unjustifiable and the fault of the complainant/prosecutor, a stay for delay will not be granted in the absence of serious prejudice to the defendant that could not be cured within the trial process.

England and Wales does not adopt the aggressive approach to jurisdiction of some other jurisdictions (particularly the USA) in relation to extraterritorial reach. The general rule remains that a crime is deemed to have been committed within the UK’s jurisdiction provided a “substantial part of the offence” was committed there, even if the main or final constituent part took place abroad.

However, the position may be different in respect of certain offences, particularly white-collar offences. A prime example is money laundering. Under the Proceeds of Crime Act 2002 (POCA), money laundering is an act that constitutes an offence under the legislation, or an attempt, conspiracy or incitement to commit any of those offences, or aiding, abetting, counselling or procuring their commission. The act constituting an offence need not have been committed in the UK, nor must it be a criminal offence in the jurisdiction in which it took place, provided that it would constitute an offence if done in the UK.

This concept has subsequently been confirmed in case law, ie, in a case where the proceeds of frauds against victims in England and Wales were sent to Spain. The defendants were charged with laundering the proceeds of the fraud, and the monies were already in Spain by the time that the offence was committed. The Court of Appeal held that Parliament intended POCA to have an extraterritorial effect. The effect of this decision is that the prosecution need not concern itself with the location of the commission of the specified money laundering offence so long as it would constitute an offence if done in the UK.

That said, there is a territorial defence where the allegedly criminal conduct takes place outside the UK and in a country where such conduct is lawful. If a defendant knows, or believes on reasonable grounds, that the relevant criminal conduct occurred outside the UK and where the conduct was lawful under local law, s/he may have a defence.

White-collar offences that fall under the Bribery Act 2010 are another example of this jurisdiction casting a wider net than the general principle would ordinarily permit. The Act confers a wide scope if the organisation is incorporated or formed in the UK, or if any part of its business is carried out in the UK (irrespective of where in the world the acts or omissions forming the offence were committed).

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) created a new “senior manager” test for the attribution of criminal liability for corporate entities. This has a wide extraterritorial effect. Corporate entities may be held criminally liable for an offence, even if the offending took place outside the UK, as long as the offending would constitute a criminal offence in the location where it took place.

Under the UK’s previous membership of the EU, the courts and authorities within the UK had access to the EU’s Mutual Legal Assistance (MLA) provisions (eg, the European Arrest Warrant (EAW) and arrangements for co-operation and information sharing). Post Brexit, the UK is no longer an EU member. Access to those measures is now subject to agreement with the EU, or with individual EU member states.

The current lists of bilateral MLA and extradition agreements to which the UK is party are considered on a state-by-state basis. The UK does not operate any universal blocking statutes or equivalent regulation that cover extradition and MLA. However, the provisions of the Human Rights Act, which protects fundamental rights and freedoms, would still apply.

In England and Wales, criminal liability can apply to individuals and legal entities. A corporation has its own legal personality and can be criminally liable in its own right, entirely separate from individuals. It is presumed that a company has criminal liability unless legislation specifically indicates to the contrary.

The question of whether a corporate entity is subject to corporate criminal liability will be determined by whether it is capable of being attributed with the necessary “state of mind” required for guilt (mens rea). Previously, two potential routes existed to establishing corporate criminal liability, as follows.

• Vicarious liability: As a rule of thumb, where vicarious liability for an offence applies, a company can be liable for the acts of its servants or agents in exactly the same way as for an individual, but only where this is set out in the relevant law governing that offence. This often applies where the offence is one of strict liability (offences that do not require proof of intention, recklessness or negligence). Usually, any corporate prosecution will be linked to the separate prosecution of a controlling officer and/or other employees.
• The identification principle: In assessing a corporate entity to determine whether it has the requisite state of mind to be guilty of an offence, a prosecutor had to identify and establish a directing mind and will of the company, and then prove corporate criminal liability through his/her conduct and state of mind. As a matter of pragmatism, a corporate entity cannot be charged with any offence that is not capable of being punishable with a fine, since a company or statutory corporation cannot be imprisoned.

In a significant development, the ECCTA replaced the identification principle in respect of scheduled offences with the new concept of a senior manager test that defines which actions can be attributed to a corporate entity. It is anticipated that this will allow prosecutors to fix companies with criminal liability more easily, as they no longer have to rely on the vague and narrowly applied “identification doctrine”.

The concept of “senior manager” will include any individual who plays a significant role in:

• the making of decisions about how the whole or a substantial part of the activities of the body corporate or partnership are to be managed or organised; or
• the actual managing or organising of the whole or a substantial part of those activities.

The new rules of attribution also apply to attempts or conspiracy to commit offences listed, in addition to aiding, abetting, counselling or procuring the commission of those offences.

The policy determining when to pursue a legal entity, an individual or both is set out in guidelines agreed by the Director of Public Prosecutions (DPP) and the Director of the Serious Fraud Office (SFO). These guidelines state that effective prosecution of companies will have a deterrent effect, protect the public and support ethical business practices. However, prosecution of a company should not be seen as a substitute for the prosecution of criminally culpable individuals such as directors, officers, employees or shareholders. As a general rule, it is considered best practice to prosecute companies and individuals at the same time, although it is recognised that this may not always be possible, especially where delay could result in unfairness to one or more of the parties.

In the context of a merger or acquisition, a successor entity may be held liable for offences committed by the target entity that occurred prior to the merger or acquisition. Sometimes, an acquisition may involve the dissolution of a corporate entity resulting in no legal entity being left to bear liability. But in most cases, corporate entities do continue to exist, either as a subsidiary or as part of the successor entity. In such circumstances, the corporate offender will still bear liability, and its owner/successor will therefore be liable for the fine/costs flowing from corporate liability in the same way that it would be liable for any other liability of the entity.

Notably, where a company has been taken over, and the new entity or parent company has identified criminality and brought it to the attention of the relevant authorities (and not profited from the wrongdoing), that will be highly relevant as to whether the authorities are willing to agree to a deferred prosecution agreement (DPA), rather than prosecuting the corporate.

Although sentencing is entirely a matter for the judge, the Sentencing Guidelines Council publishes sentencing guidelines for all offences, which the court is bound to apply. For example, there are specific guidelines covering fraud, bribery, and money laundering. As discussed earlier, DPAs currently only apply to companies, not individuals.

It is important to distinguish between seeking compensation within criminal proceedings and by way of separate civil action. In any case where a defendant is convicted of an offence that involves personal injury, loss or damage to property, the sentencing court may make a compensation order “to pay compensation for any personal injury, loss or damage resulting from that offence or any other offence which is taken into consideration by the court in determining sentence”.

Since 2012, in any case in which the court has the power to make such an order, it is obliged to consider doing so. In determining the amount of compensation, the order “shall be of such amount as the court considers appropriate, having regard to any evidence and to any representations that are made by or on behalf of the accused or the prosecutor”. In conducting that assessment, the court must have regard to the defendant’s means. Accordingly, unlike in relation to civil liability whereby a victim can obtain an order for the full amount of a loss irrespective of the defendant’s ability to pay, a compensation order will not necessarily cover the full amount lost, especially if the defendant has limited assets. Although the court can make an order for longer, it should generally not be looking at payment over a period of more than two or three years, and should therefore assess what is a “realistic” amount that could be paid over that time period.

Notably, a compensation order is limited to the amount lost and not already recovered. This can include the loss of interest on any sums stolen. It should also be noted that a compensation order can only be made in respect of loss from an offence for which a defendant was convicted and/or an offence that was taken into consideration.

In terms of the ability to secure compensation via civil proceedings, where a victim has suffered financial loss as a result of white-collar crime, there will almost inevitably be a civil cause of action against the offender (eg, via the tort of deceit or fraud, or by way of a restitutionary claim). Such a claim can be brought irrespective of whether the offender has been convicted (or even charged) with the wrongdoing. However, in the absence of a conviction, the victim will have to prove the wrongdoing to the civil standard. Following conviction, the fact of the conviction will be admissible and automatically satisfy the civil burden of proving the misconduct, which means that the claimant victim would need to prove only the consequent losses.

It is not unusual for criminal and civil proceedings to run in parallel. For the claimant, it might be advantageous to wait until the conclusion of criminal proceedings before pursuing civil claims against a corporate or individual wrongdoer. Equally, because criminal proceedings can take a substantial length of time, claimants often issue civil proceedings before then.

All criminal courts have the power to order compensation following a criminal conviction.

In relation to civil claims, if the claim is under GBP100,000, it will be brought in the County Court, while claims above GBP100,000 will usually be brought in the High Court. Class actions or equivalent procedural means are admitted in the UK jurisdictions for white-collar matters, although they are far less common in this jurisdiction than in the USA.

Enforcement Authorities

The police investigate a broad range of economic crime and have specialist financial crime investigators.

The Crown Prosecution Service (CPS) prosecutes in police and HM Revenue and Customs (HMRC) cases. It has an economic crimes division specialising in fraud and white-collar offences.

The SFO exists to investigate and prosecute serious fraud. It is also the main prosecution agency for offences of serious bribery and corruption.

The Financial Conduct Authority (FCA), which is the primary regulator of financial markets, has statutory functions as a prosecutor for offences relating to these markets. In recent years, it has increasingly prosecuted individuals engaged in unregulated investment schemes and breaches of AML procedures.

The National Crime Agency (NCA) has adopted a more prominent role in both the strategic response to financial crime and operational investigations and enforcement.

Civil or administrative enforcement against white-collar offences

A system of civil and regulatory enforcement exists that deals with a wide range of white-collar criminal conduct, either alongside or separate from any criminal prosecution. Such enforcement is generally conducted by financial regulators such as the FCA (see the earlier part of this section), the Prudential Regulation Authority (PRA), or regulators of regulated professions (for example, the Financial Reporting Council is the regulator for accountancy professionals and often takes regulatory action against accountants for conduct that also amounts to criminal conduct).

In addition, white-collar criminal conduct often involves misconduct by company directors. It is therefore common for the Official Solicitor and/or Insolvency Service to take action against companies and company directors accused of wrongdoing to dissolve/disqualify them. This can either be in parallel to criminal proceedings or free-standing.

Some agencies have both criminal and regulatory functions (eg, the FCA), but this does not necessarily create a conflict of interest since criminal and regulatory proceedings can, and regularly do, run in parallel. Inevitably, the legal tests applied in each situation may be different. For example, the criminal standard of proof is whether the court is sufficiently satisfied that it is sure (previously beyond reasonable doubt, although the meaning is the same), whereas regulatory proceedings are almost always determined on the balance of probabilities.

Specialised police squads, judges and criminal courts for white-collar offences

As noted in the foregoing, there are numerous specialist investigative and prosecuting agencies for white-collar crime. Regional police forces usually have their own specialist fraud divisions.

Currently, there are no separate or specific criminal judges/courts for white-collar crime. Likewise, fraud cases can be tried before any criminal court/judge. That said, the majority of serious white-collar criminal cases in England and Wales are tried at Southwark Crown Court – effectively the designated fraud court for London, where all the sitting judges are highly experienced in dealing with white-collar crime. High Court judges may be brought in to try the most serious, complex and/or high-profile cases.

There are plans to build a new City of London Law Courts, which has been described as the flagship for His Majesty’s Courts and Tribunal Service, as well as the Ministry of Justice. It will increase the number of courtrooms from eight to 18 in the City of London, housing Crown, Magistrates, County and Civil Courts in a single building, alongside a new HQ for the City of London Police on the same site. The development has been described as providing “significantly improved facilities and will be equipped to deliver justice in the modern age, with a focus on economic crime and fraud”.

Investigations are usually instigated when an appropriate agency becomes aware of an alleged offence, either by way of a report from a victim, a self-report or a report/tip-off (eg, from a whistle-blower). Different agencies formulate their own policies as to when and whether to initiate an investigation. For example, the SFO’s policies make clear that they are selective in the cases they choose to investigate. Their policy statement states that:

“The SFO can only take on a very small number of cases where:

• the scale of loss is very large;
• the impact on the UK economy could be significant;
• the UK’s reputation as a safe place to do business could be affected;
• the level of factual or legal complexity is high; and
• there is a strong public interest in pursuing the case”.

However, even if the SFO decide not to take a case on, they will often refer it to another agency (eg, the police/Action Fraud).

The most commonly used investigative powers for the purposes of investigating white-collar crime are as follows.

Production Orders

Production orders, under either the police and Criminal Evidence Act or POCA, are the most frequently used powers for obtaining documents in relation to white-collar crime. These orders involve the investigator applying to a court for an order requiring production of specified material in the possession of the recipient. Under the test that is applied, there must be reasonable grounds to suspect that an indictable offence has been committed and that the documents to which the order relates are likely to be relevant evidence and of substantial value to an investigation into that offence.

Disclosure Notices

A disclosure notice is defined by the Serious Organised Crime and Police Act 2005 as a notice in writing requiring the person to whom it is given to do all or any of the following:

• answer questions with respect to any matter relevant to the investigation;
• provide information with respect to any such matter as is specified in the notice; or
• produce such documents, or documents of such descriptions, relevant to the investigation as are specified in the notice.

The criteria for issuing a disclosure notice are:

• that there are reasonable grounds for suspecting that a person has committed a qualifying offence;
• that the person subject to the notice has information that relates to a matter relevant to the investigation of the offence; and
• that there are reasonable grounds for believing that information that may be provided by the person who is the subject of the notice is likely to be of substantial value (whether or not by itself) to the investigation.

Not all offences qualify for disclosure notices, but the list of qualifying offences does include money laundering, tax frauds and false accounting. The issuing of a disclosure notice must be authorised by the DPP, or by an authorised prosecutor to whom authority has been delegated. There is also a similar power under POCA where the investigation relates to confiscation or a civil recovery investigation.

Search and Seizure

Depending upon the type of material sought, applications can be made to a Magistrates’ Court for a warrant to enter premises and seize relevant documents. Although the specific applicable test will depend on the provision applied, the investigator must generally show that there are reasonable grounds for believing that an indictable offence has been committed and there is material on the premises that is likely to provide relevant evidence of substantial value (whether or not by itself) to the investigation. A similar power exists under Proceeds of Crime legislation where the investigation relates to confiscation or a civil recovery investigation.

Unexplained Wealth Orders (UWOs)

UWOs were introduced at the beginning of 2018, creating a number of powers whereby a court can order a person to set out the nature and extent of their interest in property and detail how it was obtained. They apply in circumstances where the court is satisfied that the respondent is either a politically exposed person or someone connected to a serious crime; the respondent has an interest in property worth over GBP50,000; and there are reasonable grounds to suspect that the respondent’s known sources of lawfully obtained income would have been insufficient for him/her to obtain the property. The UWO can also require the production of documents relating to the property and its acquisition.

SFO Powers

In addition to the enforcement powers described in the foregoing (eg, obtaining warrants for search and seizure), the SFO has the power to “require [a] person whose affairs are to be investigated… or any other person whom he has reason to believe has relevant information to answer questions or otherwise furnish information with respect to any matter relevant to the investigation…” and to “require [a] person under investigation or any other person to produce… any specified documents which appear to the director to relate to any matter relevant to the investigation…” It is a free-standing criminal offence to fail to comply with such a notice, to provide false or misleading information or to destroy relevant documents.

The SFO also has powers to require such an individual to attend an interview under Section 2 (see the foregoing). Otherwise, any interview will necessarily be voluntary unless the individual has been arrested and interviewed under caution (albeit in such circumstances, the individual is entitled to remain silent, and the only sanction is the potential drawing of adverse inferences should the matter go to trial).

Under new rules brought in by the ECCTA, the SFO may require an individual or corporation to provide documents or information prior to the formal opening of an investigation. This is achieved through the issue of a Section 2 Notice, which enables the SFO to determine whether to start an investigation where it appears to the SFO that relevant conduct may have taken place. Prior to the amendment, relevant conduct was limited to suspected international bribery and corruption. The new law expands these powers to all SFO cases, bringing fraud and domestic bribery within its orbit.

Strictly speaking, internal investigations are neither necessary nor mandatory. Nevertheless, they can be very significant in decisions taken by the authorities about whether or not to prosecute. The fact of an internal investigation leading to self-reporting is an important feature in the court approving a DPA (see 2.6 Deferred Prosecution). It has been emphasised in a number of DPA judgments that early co-operation, including proper internal investigation, is an important feature justifying a discount of the financial penalty.

The precise mechanism for the initiation of white-collar prosecutions may depend on the nature of the prosecutor and the specific offence. As noted earlier, any prosecuting agency making a decision to charge will do so in accordance with the full code test for Crown prosecutors.

In CPS cases (ie, police or HMRC investigations), prosecution is normally initiated by way either of a charge at a police station or the issue of a summons or postal requisition to attend at the Magistrates’ Court. Prosecutions by the SFO, or other agencies, are generally initiated either by the issuing of a summons or requisition notice to attend at the Magistrates’ Court. Notably, some offences require the personal or delegated consent of either the DPP or the Attorney General prior to charge. Offences requiring pre-charge consent include offences under the Bribery Act.

DPAs have been available in this jurisdiction since 2014. They provide a mechanism by which an organisation (a body corporate, a partnership or an unincorporated association, but not an individual) can avoid prosecution for certain economic offences through an agreement with the relevant prosecuting authority. In this jurisdiction, the prosecuting authorities are the DPP and the SFO.

DPAs have the following key features:

• they enable a corporate body to make full reparation for criminal behaviour without the collateral damage of a conviction (for example, sanctions or reputational damage that could put the company out of business, destroying the jobs and investments of innocent people);
• they are concluded under the supervision of a judge, who must be convinced that the DPA is “in the interests of justice” and that the terms are “fair, reasonable and proportionate”;
• they avoid lengthy and costly trials; and
• they are transparent public events.

As of September 2024, 12 DPAs have been achieved by the SFO, with the CPS achieving its first DPA in December 2023.

Criminal company law and corporate fraud offences include the following: bribery, influence peddling and other such related offences; market abuse and insider dealing; tax fraud; cartel offences such as price-fixing, market sharing, customer sharing, limiting production, limiting supply and bid-rigging; cybercrimes; computer fraud; market manipulation; aiding and abetting and money laundering.

As described elsewhere in this guide, English criminal law does not necessarily distinguish between the company and the individual in the designation of offences, or in their constituent elements. Rather the distinction arises in the evidential test for proving guilt, for example the senior manager test. There are, however, some offences that are specifically designed for corporates, such as the failure to prevent offences relating to bribery and the facilitation of tax evasion. A further offence of failure to prevent fraud, which was introduced by the ECCTA, only applies to large organisations and cannot come into force until guidance is published. As discussed, distinctions also arise in terms of sentence: effectively, a corporate can only be fined.

The UK Bribery Act contains four main offences:

• a general offence of bribing;
• a general offence of being bribed;
• an offence of bribing a foreign public official; and
• a corporate offence of failing to prevent bribery by persons associated with relevant commercial organisations.

The individual offences are committed when a person (individual or corporate) either: (i) offers, promises or gives another person; or (ii) requests, agrees to receive or accepts a financial or other advantage, with the intention of procuring or rewarding the “improper performance” of a “relevant function” by any person.

“Relevant function” is defined very widely: wherever there is an expectation that the relevant person will act in good faith, impartially, or in accordance with a position of trust (in the UK or abroad), this will be covered. Improper performance occurs when a relevant function is performed in breach of such expectation. With regard to the offence of bribing a foreign public official, it is sufficient that the relevant advantage is intended to obtain or retain an advantage in the conduct of business by influencing a foreign public official. Unlike the US Foreign Corrupt Practices Act (FCPA), there is no exception for “facilitation payments”; ie, these are illegal under UK legislation.

Jurisdiction for the principal offences can be based on either:

• any act or omission that forms part of the offence taking place in the UK; or
• a close connection to the UK (eg, residency, incorporation, citizenship).

The failure to prevent offence carries strict liability: a bribe paid anywhere in the world by a commercial organisation’s “associated person” with the intention of benefiting the organisation (even without its knowledge) will cause the organisation to commit an offence. The only defence is that it had in place “adequate procedures” to prevent bribery. The maximum sentence for Bribery Act offences is ten years’ imprisonment and/or a fine up to the statutory maximum (or, in the case of a corporate offender, simply a financial penalty).

The Bribery Act creates a strict liability offence of failure of commercial organisations to prevent bribery. Under this offence, if a person (A) associated with a company bribes another to the benefit of the company, then the company is guilty of an offence, irrespective of whether it knew of or approved of the bribe, unless the company can prove that it had adequate procedures in place designed to prevent persons associated with it from undertaking such conduct. It should be noted that person A need not be an employee or agent of the company in order for the company to be liable if A is associated with the company by performing services for it.

A person commits the criminal offence of insider dealing if they have inside information and:

• that information is price-sensitive in relation to shares;
• they deal in those shares, or encourage someone else to deal in them or pass inside information to another person; and
• the dealing takes place on a regulated market or through a professional intermediary such as a broker.

The maximum sentence for the offence is seven years’ imprisonment and/or an unlimited fine.

There are numerous offences relating to tax fraud, with different common law and statutory offences for different types of tax. The main offences are as follows.

• Cheating the revenue – this is a common law offence, so the maximum sentence is life imprisonment. However, the guidelines suggest a range of sentences depending on the value and complexity, ranging from community service – where the fraud is valued at under GBP20,000 and the defendant’s role is minor – through to 17 years’ imprisonment for tax frauds valued at over GBP50 million. Cheating includes any form of fraudulent conduct that results in the diversion of money from the revenue and in depriving the revenue of money to which it is entitled; it requires deliberate conduct by the defendant to prejudice, or take the risk of prejudicing, the revenue’s right to the tax in question knowing that s/he has no right to do so; it is a conduct offence, and no actual loss need be proved.

• Fraudulent evasion of income tax – this is an offence under the Taxes Management Act 1970, for which the ingredients are simply that the defendant was knowingly concerned in the fraudulent evasion of income tax by themselves or another. The maximum sentence is seven years’ imprisonment or a fine, or both.
• Fraudulent evasion of VAT– this is an offence under the VAT Act 1994, for which the ingredients are simply that the defendant was knowingly concerned in the fraudulent evasion of VAT by themselves or another. The maximum sentence is seven years’ imprisonment or a fine, or both.
• Failure to prevent the facilitation of tax evasion - The Criminal Finances Act 2017 created two new offences. The first relates to the evasion of UK tax and the second to the evasion of foreign tax.

Three stages apply to these offences:

• stage one (evasion) – the criminal evasion by a taxpayer (either an individual or a legal entity) under existing law;
• stage two (facilitation) – the criminal facilitation of tax evasion by an associated person of the relevant body who is acting in that capacity; and
• stage three (failed prevention) – the relevant body failed to prevent a person associated with it from committing the criminal facilitation act.

Only a “relevant body” can commit the new offences. This is defined as “a body corporate or a partnership”, wherever incorporated or formed. The offences therefore apply to companies, partnerships and not-for-profit organisations. A relevant body can only commit the new offences if a person associated with it criminally (deliberately and dishonestly) facilitates a tax evasion offence. A person is “associated” with a relevant body if that person (an individual or corporate body) performs services for, or on behalf of, the relevant body.

The facilitation comprises being knowingly concerned in, or taking steps with a view to, the fraudulent tax evasion of another, as well as aiding, abetting, counselling or procuring another person’s offence of tax evasion. However, the associated person does not commit a tax evasion offence when they inadvertently, or even negligently, facilitate another person’s tax evasion.

There is a complete defence to the offences for a relevant body if:

• it has in place reasonable preventative procedures as it was reasonable in all circumstances to expect it to have; or
• it was not reasonable, in all the circumstances, to expect it to have any preventative procedures in place.

The offence is modelled on the Section 7 Bribery Act offence of corporate failure to prevent bribery. The statutory defence is similar to the equivalent defence of “adequate procedures to prevent” bribery contained in the Bribery Act. The offence is punishable by a fine.

The Money Laundering Regulations 2017 require relevant persons in regulated sectors to retain records for between five and ten years. In particular, records need to be kept of any documents and information obtained by the relevant person to satisfy the customer due diligence requirements in the regulations and sufficient supporting records (consisting of the original documents or copies) in respect of a transaction (whether or not the transaction is an occasional transaction), which is the subject of customer due diligence measures or ongoing monitoring to enable the transaction to be reconstructed.

There is power to impose civil penalties for breaches. Additionally, a person who has contravened the requirements imposed on them is also guilty of an offence punishable by up to two years’ imprisonment or a fine, or both.

Cartel Offence

An individual will be guilty of the revised criminal cartel offence created by the Enterprise Act 2021 if he or she agrees to make or implement arrangements that involve:

• price-fixing;
• market sharing;
• customer sharing;
• limiting production;
• limiting supply; or
• bid-rigging.

There is no requirement to show that the individual acted dishonestly, or even that the individual intended to restrict competition as a result of the agreement. It is sufficient that the arrangements would fix prices/limit supply, etc, if they operated as the parties to the agreement intended, even if the agreement is never actually implemented.

The maximum sentence for the offence is five years’ imprisonment and/or an unlimited fine.

Trading standards prosecutions can be brought by the Office of Fair Trading (OFT), together with the local authority regulatory body for trading standards. They can also be brought by the Food Standards Agency. These regulatory bodies can investigate and prosecute in a number of areas across wholesale or retail businesses. The potential offences include dealing in counterfeit goods, breaching copyright, and breaching trade mark regulations.

The Consumer Protection from Unfair Trading Regulations 2008 place a duty on traders to behave ethically when dealing with customers and outline penalties should they fail to do so. For example, they forbid “misleading actions” and “misleading omissions” that cause, or are likely to result in, the average consumer taking a “transactional decision” that they would not otherwise have taken. They also prohibit pyramid schemes and aggressive selling practices, and infer a general duty not to trade unfairly.

For the most serious cases, imprisonment is an option, with maximum periods of up to two years for some trading standards offences.

Cybercrime is an umbrella term used to describe two closely linked, but distinct, forms of criminal activity. The Government’s National Cyber Security Strategy defines these as:

• cyber-dependent crimes – crimes that can be committed only through the use of information and communications technology (ICT) devices, where these are both the tool for committing the crime and the target of the crime (eg, developing and propagating malware for financial gain, hacking to steal, damage, distort or destroy data and/or a network or activity); or
• cyber-enabled crimes – traditional crimes that can be increased in scale or reach by the use of computers, computer networks or other forms of ICT, such as cyber-enabled fraud and data theft, where the underlying crime will be prosecuted under the appropriate legislation.

Cyber-dependent crimes are covered by the Computer Misuse Act 1990. These include causing a computer to perform a function with intent to secure unauthorised access to computer material; unauthorised access with intent to commit or facilitate commission of further offence; unauthorised acts with intent to impair the operation of a computer; unauthorised acts causing, or creating a risk of, serious damage; and making, supplying or obtaining articles for use in offences.

Other offences arise under the Investigatory Powers Act 2016, which covers the interception of communications, and the Data Protection Act 2021, regarding the unlawful obtaining, disclosing, procuring disclosure or selling of personal data.

Sanctions regimes affecting UK businesses or persons may be imposed to bring about a change in policy or activity by the target country, government, entities or individuals. They are reviewed, lifted, revoked or adapted in the light of changes in the behaviour of the target country. They will typically have been created by one of the following: the United Nations Security Council (UNSC), the Council of the EU under its Common Foreign and Security Policy (CFSP), the US Office of Foreign Assets Control (OFAC) or the UK government. Other countries impose their own sanctions regimes, about which UK businesses need to keep themselves informed if they are trading in these jurisdictions.

Restrictions may include a requirement to notify or seek the consent of the Office of Financial Sanctions Implementation (OFSI) before receiving money from certain countries (such as Iran). Intentionally, the legislation is widely drawn and, in some cases, prohibits financial institutions and individuals from dealing in any way with the funds or assets of a designated person. Sanctions may also be applied to direct and indirect investment by companies, as well as the provision of goods and technologies.

There are serious consequences for entities that breach sanctions. The financial sanctions regime requires absolute compliance to avoid the risk of prosecution. Criminal liability arises under UK law if sanctions are breached by designated entities, or by individuals or companies transacting with prohibited entities or receiving money without notifying or seeking authorisation from the OFSI.

The Financial Services Act 2012 creates three offences of market manipulation that criminalise the making of false or misleading statements, or impressions with an intention to induce another to engage in market activity:

• the making of a misleading statement, or the dishonest concealment of material facts;
• the creation of a misleading impression (Section 90); and
• the making of a misleading statement or impression in relation to benchmarks specifically (Section 91).

The maximum sentence for any of these offences is seven years’ imprisonment and/or an unlimited fine.

A conspirator or person assisting in the commission of a corporate offence will be liable for the same sanctions as the principle if they conspire with or assist another to commit a corporate offence.

The main offences found under POCA are:

• concealing the proceeds of criminal conduct – this is committed where a person conceals, disguises, converts, transfers or removes criminal property;
• becoming involved in an arrangement to assist another to retain the benefits of criminal conduct – this is committed where a person enters into an arrangement that they know or suspect facilitates, in any way, the acquisition, retention, use or control of criminal property; and
• acquiring criminal property – a person is guilty of this if they acquire, use or possess criminal property.

Property is “criminal property” if it represents, in whole or in part, the benefit/proceeds of conduct that was either criminal conduct within the UK, or which would have amounted to an offence if it occurred in the UK; and the offender knows or suspects it represents such benefit/proceeds. The maximum sentence for these offences is 14 years’ imprisonment and/or an unlimited fine.

There is a further offence of failing to disclose knowledge or suspicion of money laundering. This only applies to persons operating in the regulated sector who fail within their obligations to properly deal with information relating to money laundering.

The ingredients of the offence are:

• the person must know or suspect, or has reasonable grounds for knowing or suspecting, that another person is engaged in money laundering;
• the information came to him/her in the course of business in the regulated sector;
• s/he can identify either the identity of the money launderer or the whereabouts of the money (or the information is reasonably capable of assisting in so identifying the launderer or whereabouts of the proceeds); and
• s/he has failed to make a disclosure to a nominated officer, or other person authorised by the NCA, as soon as practically possible after receiving the information.

The maximum sentence is five years’ imprisonment and/or a fine.

There are specific obligations in the UK to prevent money laundering, both within and outside the regulated sector. Money laundering is a criminal offence under Proceeds of Crime legislation. It is also an offence for someone in the regulated sector who knows, suspects or has reasonable grounds to suspect money laundering to fail to disclose it to the authorities. Numerous offences exist under anti-money laundering laws and regulations (particularly the Money Laundering Regulations), which impose duties to prevent money laundering and create criminal offences for failure to comply. These offences include the obligation to maintain and retain records, for example, of customer due diligence and other transactional records. Many of the offences are strict liability, and breach of the regulations can attract either regulatory fines or, following prosecution or conviction, sentences involving financial penalties, imprisonment or both.

Each offence is liable to have its own specific defence, but the general/common defences are all matters that relate to a failure by the prosecution to prove an important element of the offence (usually dishonesty). Generally, the existence of an effective compliance programme may be relevant to an assessment of honesty. In respect of the failure to prevent offences for corporates such as in the Bribery Act, and in respect of the failure to prevent the facilitation of tax evasion and/or fraud, a compliance programme will be relied upon in the statutory defence of having adequate or reasonable procedures in place.

The are no exceptions, or de minimis exceptions, for white-collar offences in this jurisdiction. Similarly, there are no exempt industries and/or sectors, although the extent of the criminality is a matter that will be considered by any prosecutor in assessing whether incurring the cost of a prosecution is in the public interest (the second limb of the full code test – see the foregoing).

There is no formal process for plea bargaining in the UK. As an adversarial system, it is a matter for the prosecutor to determine what charges will be brought and whether to accept pleas to lesser offences. To that extent, it is open to any defendant to agree to plead guilty to a “lesser” offence in return for a more serious offence either not being charged or discontinued.

It should be noted that prosecuting authorities are bound by the full code test for Crown prosecutors. This means that before any charge can be brought, the prosecutor must be satisfied that there is sufficient evidence to provide a realistic prospect of conviction (the evidence test) and also that the prosecution is in the public interest (the public interest test). A prosecutor can only charge an offence that meets both limbs of the test. However, in considering the appropriate charge to bring, or whether to accept a plea to a “lesser” offence than that charged, a prosecutor must have regard to the public interest. Given the limitations on resources and court time, a suitable plea to a lesser offence may well be in the public interest.

However, whilst there is scope to negotiate as to the charge to which a plea is to be entered, there is no scope to negotiate as to sentence (save insofar as the maximum sentence is a function of the offence). Sentencing is entirely a matter for the judge and not for the prosecutor. In this jurisdiction, a prosecutor has no right to ask for any particular sentence, still less to bind the hands of a sentencing judge.

Accordingly, whilst a prosecutor can agree to accept a plea to a lesser offence (which may carry a lower sentence than a more serious charge), the judge will be free to sentence on the basis of the facts of the offence, and the defendant cannot negotiate with the prosecutor to secure a particular sentence. The only real scope for negotiation with a prosecutor in relation to sentence might be in reaching agreement on how the facts of the case are put in accordance with the sentencing guidelines, and to limit whether the prosecution was seeking confiscation proceedings following conviction.

Although a defendant cannot negotiate with a prosecutor in relation to sentence (still less negotiate with a judge), there is a mechanism whereby a defendant can seek a Goodyear indication from the sentencing judge. This would indicate what the maximum sentence would be if the defendant pleaded guilty on a particular agreed basis. However, judges are not obliged to give such indications even if asked, and many will not do so. If an indication is given, and the defendant pleads guilty on that basis, then the judge is bound by the indication (although this does not prevent the prosecution from appealing if the sentence passed is wrong in law or “unduly lenient”).

Self-reporting and/or co-operation with investigators or prosecuting authorities is a mitigating factor for both individuals and corporates that may also influence whether a prosecution takes place at all, in particular in the case of corporates who might seek a DPA, as discussed in the foregoing.

Statutory protection afforded to whistle-blowers emanates from employment law. The whistle-blowing legislation protects workers. A worker in this context includes not only employees, but also consultants (who undertake to provide work personally), contract workers and agency workers, among others. A disclosure of the commission of a criminal offence is a qualifying disclosure and affords the whistle-blower protection from victimisation by their employer.

There are no specific incentives for whistle-blowers to report white-collar offences in the UK other than a tactical advantage in negotiations with prosecutors where the whistle-blower was complicit in the malpractice. Furthermore, such co-operation would attract credit in reducing any sentence imposed by the court – if the case was prosecuted and the whistle-blower either pleaded guilty or was convicted. Companies are obliged to implement policies and internal procedures that protect whistle-blowers.