UK Fraud Agency Tightens Corporate Accountability with New Six-Test Prosecution Framework

The UK's Serious Fraud Office has introduced a stringent six-test framework for evaluating corporate compliance programs, marking a significant shift in how prosecutors will approach cases of alleged fraud following the enactment of new legislation that criminalizes failures to prevent economic crime.

The updated guidance, released in November 2025, establishes clear benchmarks that companies must meet to demonstrate adequate anti-fraud measures, as authorities move to strengthen corporate accountability in the wake of mounting concerns about financial misconduct in British business.

Background and Context

The guidance overhaul follows the introduction of the Economic Crime and Corporate Transparency Act 2023, which created a new corporate offense of failing to prevent fraud. This legislative change represents the most substantial expansion of corporate criminal liability in the UK since the Bribery Act 2010, addressing long-standing concerns about the adequacy of existing frameworks for combating economic crime.

The new offense applies to large organizations and mirrors the "failure to prevent" model established in the UK's Bribery Act, which has been credited with significantly improving corporate anti-corruption standards since its implementation over a decade ago.

Key Figures and Entities

The Serious Fraud Office (SFO), the UK's specialist prosecutor for serious financial crime, developed the new guidance in consultation with corporate governance experts and legal practitioners. The agency, led by Director Nick Ephgrave, has faced criticism in recent years over its conviction rates and the complexity of its investigations.

According to the SFO's official statement, the six tests will be applied consistently across all cases involving alleged corporate fraud, ensuring that prosecution decisions are based on transparent and predictable criteria. The framework aims to provide clarity to businesses while maintaining the agency's discretion in pursuing cases where corporate compliance failures have enabled financial misconduct.

Legal and Financial Mechanisms

The six-test framework evaluates companies on: (1) the adequacy of risk assessment procedures; (2) the implementation of proportionate prevention measures; (3) top-level commitment to fraud prevention; (4) due diligence on business relationships; (5) staff training and communication; and (6) monitoring and review mechanisms. These tests must be satisfied to establish a statutory defense against the new offense.

The guidance emphasizes that compliance programs must be tailored to specific fraud risks faced by each organization, with generic or "off-the-shelf" solutions unlikely to meet the required standards. Prosecutors will assess whether companies have conducted comprehensive fraud risk assessments and implemented appropriate controls in response to identified vulnerabilities.

International Implications and Policy Response

The UK's approach aligns with growing international momentum toward strengthening corporate liability for economic crimes. The OECD has noted increasing adoption of "failure to prevent" models across member states, while the European Union is considering similar provisions in its upcoming directive on corporate sustainability due diligence.

Business groups have expressed concerns about the compliance burden, particularly for multinational companies operating across different regulatory regimes. However, transparency advocates argue that the new framework will help level the playing field by ensuring that all organizations face consistent expectations for preventing fraud, regardless of their size or sector.

Sources

This report draws on the Serious Fraud Office's official guidance, the Economic Crime and Corporate Transparency Act 2023, and reporting by MLex on regulatory developments in the UK financial crime enforcement landscape. Additional context was provided by parliamentary debates on the legislation and statements from the UK's Department for Business and Trade.