Compliance under the Economic Crime and Corporate Transparency Act, 2023
A guide for Indian businesses
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) marks a transformative development in the UK’s legal landscape, introducing stricter corporate conduct obligations, particularly fraud prevention. The Act aims to improve corporate transparency and tackle financial crimes, including fraud and wider economic crimes, by holding companies accountable for failing to prevent such offences. The ECCTA introduces a new corporate offence, Failure to Prevent Fraud (FTPF), which will take effect from 1 September 2025. For Indian businesses engaging with UK markets, this presents both a compliance challenge and an opportunity to reinforce ethical standards and enhance global credibility.
Understanding the FTPF offence
The FTPF offence marks a significant shift in fraud compliance. Historically, fraud prevention efforts have focused on safeguarding organisations from being victims. Now, the emphasis is on frauds committed for the benefit of the organisation, even if the benefit is never actually realised.
The law also broadens the traditional “identification principle” by holding companies liable for actions taken by any senior manager, defined as anyone who plays a significant role in managing or organising a substantial part of the company’s activities.
Key implications for Indian businesses
Indian subsidiaries of large UK companies and organisations (which meet the predefined criteria) with operations, clients or collaborations in the UK or serving UK-based companies, should consider the following:
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Conclusion
The ECCTA sets a new standard for corporate accountability. Indian businesses subject to ECCTA compliance need to act now by embedding ethics into their culture, strengthening controls, training teams and investing in technology.
Nikhil Bedi
K. V. Karthik
Saurabh Khosla
