Corporate Crime analysis: The October 2019 Queen's Speech included a significant number of Bills impacting the work of corporate crime lawyers. Despite the dissolution of Parliament prior to the December 2019 General Election, the announced Bills demonstrate the perceived legislative priorities of the Conservative Party and which may be resurrected dependent upon the result of the forthcoming General Election. John Binns, partner at BCL Solicitors LLP, examines the implications of the announced legislation.

Which Bills in the Queen's Speech might have impacted corporate crime lawyers?

The Queen's Speech of 14 October 2019 had an unusual political context, and given the subsequent dissolution of Parliament, it might now be best considered as effectively an annex to the Conservatives' election manifesto. With that caveat in mind, it and its associated Background Briefing provide a useful insight into potential imminent legislative developments, several of which have potential relevance to corporate crime lawyers.

The key proposal of course is the European Union (Withdrawal Agreement) Bill (EU(WA)B), which is designed to give effect to the UK's decision to leave the EU on the terms negotiated by the Prime Minister. That in turn provides the necessity for the proposed Bills on financial services, medicines and medical devices, and extradition, as well as the already published Environment Bill. All of these have potential relevance to corporate crime lawyers, as do the Pension Schemes Bill, the Sentencing (Pre-Consolidation Amendments) Bill, and the proposal for new building safety standards legislation.

Of those, which do you consider the most significant proposed Bills for corporate crime lawyers and why?

EU(WA)B of course has significant general importance to the UK in a number of ways, not least by ensuring its departure from the EU and avoiding an immediate 'no deal' outcome. By confirming an 'implementation period' to the end of 2020, it would (among other things) oblige the UK to enforce the EU sanctions regime during that period and to transpose the Fifth Money Laundering Directive 2015/849, and enable continued cooperation in criminal justice measures (to an extent—without membership of Europol and Eurojust, or the ability to lead joint investigation teams (JITs), and with some adjustments to the operation of the European Arrest Warrant (EAW)).

From the information currently available, which do you think will be the least controversial and which will be the most controversial and why?

EU(WA)B has of course already proved controversial and will doubtless continue to be so, at least until the General Election result. A key issue is the process for deciding whether to request an extension of the implementation period, without which the UK's participation in the EAW and the other aforementioned criminal justice cooperation measures (among many other things) could (absent an agreed future partnership by then) come to an abrupt stop at the end of 2020.

The Environment Bill has been broadly welcomed so far and seems set to be relatively uncontroversial; the real test will be how the new Office for Environmental Protection uses its powers in practice, and how closely future governments will adhere to environmental principles without the threat of financial penalties.

The provisions of the Medicines and Medical Devices Bill and the building safety standards legislation are yet to be revealed. The Briefing implies that the former will include greater delegated powers for regulators 'to develop innovative regulation to enable early access to cutting edge technologies and break new ground in complex clinical trials', as well as a scheme to combat counterfeit medicines entering supply chains, and a registration scheme for online sellers. The latter will of course follow the lessons from the Grenfell disaster, bringing 'clearer accountability for, and stronger duties on, those responsible for the safety of high-rise buildings... [and] enforcement and sanctions to deter non-compliance with the new regime'. In both cases, the detail will determine whether these measures are deemed appropriate or sufficient.

Two measures of relevance to crime generally, including corporate crime, have the potential to be controversial. The Extradition (Provisional Arrest) Bill aims to fill part of the gap left by the UK's departure from the EAW scheme by allowing for Interpol Red Notices from 'trusted countries' to be treated as de facto arrest warrants, begging of course the question of which countries are to be 'trusted' for this purpose. The Sentencing (Pre-Consolidation Amendments) Bill aims to simplify the use of sentencing guidelines by applying them retroactively—the Ministry of Justice claims this is consistent with the European Convention on Human Rights and Fundamental Freedoms as the maximum sentence is unaffected, but convicted defendants and their lawyers may find this assurance unconvincing.

There was no mention of the much-debated failure to prevent economic crime offence in the Queen's Speech—do you think such a corporate criminal offence will ever make the statute books?

The MOJ's call for evidence on a new corporate offence of failing to prevent economic crime closed on 31 March 2017, and on 12 July 2019, the Economic Crime Plan said it would be publishing the response 'shortly'. It is still awaited at the time of writing.

The widespread view on this is that the government is dragging its heels on a law that is, realistically speaking, bound to be a low priority in an agenda dominated by Brexit. That is probably right, but the problems of formulating a law that is both workable and proportionate should not be underestimated. It would join a somewhat uneven landscape in which all businesses are enjoined to prevent bribery and the facilitation of tax evasion, and the extent of a business' obligations in sanctions and money laundering varies according to the sector in which it operates. Its doubtless there is scope to build on this, but it is not as simple a job as making every business in the UK vicariously responsible for the crimes of its personnel (or 'associated persons').

One potential trigger for bringing this issue to the top of the agenda could be the Sixth EU money Laundering Directive, which requires a corporate offence of failing to prevent money laundering to be in place by 3 December 2020. The UK (thanks to its opt-out arrangements, regardless of the timing of Brexit) does not have to comply, but may find it hard to sustain a principled argument for this particular instance of 'regulatory divergence'.

Originally Publish by LexisNexis

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