UK: CPS and SFO publish joint updated guidance for ECCTA offences

Earlier this month (18 August 2025), the Crown Prosecution Service (CPS) and the Serious Fraud Office (SFO) published joint updated prosecution guidance regarding the prosecution of corporates (the Guidance). The Guidance reflects the new corporate criminal offence of ‘failure to prevent fraud’ (FTP Fraud) under s199 of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). The offence comes into force imminently on 1 September and makes large organisations (as defined) criminally liable for failing to prevent fraud by associated persons, including employees and subsidiaries.

The Guidance has been updated to include the ‘senior manager’ reform under s196 ECCTA, which extended the identification doctrine and entered force in December 2023.  This ‘senior manager’ reform provides prosecutors with another avenue to pursue a corporate entity of any size for economic crime offences.

The Guidance provides key indicators of how prosecutors will approach the ECCTA offences, and the interaction between those offences and other existing ‘failure to prevent’ offences.

What is included in relation to the new FTP Fraud offence?

The Guidance reiterates the following key points in relation to the FTP Fraud offence.

• A new ‘failure to prevent offence’
  
  The FTP Fraud offence now sits alongside s7 of the Bribery Act 2010 (failure to prevent bribery) and ss45 and 46 of the Criminal Finances Act (failure to prevent facilitation of tax evasion). The FTP Fraud offence is described as ‘an either way strict liability offence’ which applies to large organisations where an associated person ‘commits a specified fraud offence with the intention of benefiting the organisation or a person to whom the organisation provides services…’.

• ‘Reasonable procedures’ defence
  
  The Guidance discusses the defence of ‘reasonable procedures’ available under the new FTP Fraud offence:
  
  
  ‘The corporate entity will have a defence if it can demonstrate that it had in place adequate (for the purposes of the Bribery Act 2010) or reasonable (under the Criminal Finances Act 2017 and the ECCTA 2023) procedures to prevent such offending, or that it was not reasonable to expect such procedures in the circumstances.’
  
  The Guidance goes on to state that, in determining whether the evidential part of the Full Code Test is met, prosecutors should give ‘careful consideration’ to the statutory defences. The Guidance refers prosecutors to preceding Government publications regarding reasonable prevention procedures, including the six principles that organisations are expected to follow. The Guidance notes that prosecutors should consider that extant guidance as it may assist in ‘structuring interviews, identifying lines of inquiry, examining areas of weakness or omission in the prevention procedures, informing prosecutors’ assessment of the strengths and weaknesses of any claimed defence during evidential reviews and charging decisions’.
  
  The Guidance states that prosecutors may wish to consider an ‘appropriate witness adducing the relevant government guidance…as an exhibit to assist the jury’s understanding of the statutory defence’.

• Concept of ‘associated person’
  
  The ‘associated person’ concept is essential across the three ‘failure to prevent’ offences. On this, the Guidance states that ‘its precise meaning and scope may vary slightly depending on the statutory context’; it refers prosecutors and investigators to ‘refer to the relevant statute and accompanying government guidance’ depending on the specific offence.

What about the ‘senior manager’ offence under s196 ECCTA?

Under s196, prosecutors no longer need to establish that the individual was the ‘directing mind and will’ of the company for Sch 12 ECCTA offences (a broad list of economic crimes, including fraud and bribery). It will be sufficient to show that the individual was a senior manager acting within their actual or apparent scope of their authority.

The Guidance reiterates that the common law identification doctrine (the ‘directing mind and will’ test) will remain relevant where neither s196 ECCTA offence nor the s199 ECCTA applies.

What else do corporates need to be aware of?

The Guidance makes it clear that ‘an organisation facing liability under [the FTP Fraud offence] may also be prosecuted for the underlying fraud or other economic crime offence, where the conduct of the associated person can be attributed to the organisation by other means – such as through [s196 ECCTA].’

The Guidance also mentions the ‘bribery-fraud nexus’ and states that ‘where it is not possible to proceed under s7 of the Bribery Act 2010, careful consideration should be given to whether the facts support a charge’ under the FTP Fraud offence, or vice versa. This is an important reminder that businesses must take a holistic approach to managing their corporate criminal risks.

What should corporates be doing now?

The CPS press release (18 August 2025) announcing the Guidance reminds large organisations that they need to finalise preparations for the new FTP Fraud offence.

Nick Ephgrave, Director of the SFO, has said “This updated guidance, published by the SFO and CPS, will help prepare prosecutors to pursue corporations which are failing to comply with their responsibilities under the law… Now is the time to take action. Corporations must get their house in order or be ready to face investigation.”

Any corporates that have not yet considered the reasonable procedures that they need to put in place across their organisation to prevent fraud (as a defence to the FTP Fraud offence), should do so as priority. They should also be considering who may be ‘senior managers’ across their organisation for the purposes of s196 ECCTA.

Our team has advised, and is still advising, a wide range of corporate clients on these issues. To discuss further, please feel free to contact us or your usual Eversheds Sutherland relationship partner.