Dejan Jasnic · Co-founder & Compliance Lead, Trusty · 20+ years anti-fraud & compliance · ACFE Swiss Chapter Board
If your business has fewer than 250 employees or a turnover under £36m, you may have seen headlines about the Economic Crime and Corporate Transparency Act (ECCTA) and assumed it doesn’t apply to you.
That assumption is becoming increasingly risky – and it’s already showing up in supplier contracts.
While the ECCTA “Failure to Prevent Fraud” offence formally applies to large organisations, its real-world impact is being felt across the supply chain. UK enterprises facing direct criminal liability are now tightening their approach to third-party risk, pushing ECCTA compliance requirements onto suppliers, partners, and service providers.
In practice, this means SMEs are being pulled into ECCTA supply chain compliance through contracts, whether the law names them directly or not. Increasingly, large organisations are requiring verifiable evidence of fraud controls as a condition of doing business.
The ECCTA failure to prevent fraud liability gap for suppliers
Under Section 199(1)(b) of the ECCTA, a large organisation can be held criminally liable if an “associated person” commits fraud with the intention of benefiting that organisation. Depending on the nature of the relationship, associated persons can include agents, contractors, suppliers, and service providers.
The only statutory defence available is the ability to demonstrate that “reasonable procedures” to prevent fraud were in place.
Home Office Failure to Prevent Fraud guidance makes clear that reasonable procedures do not stop at internal policies. Oversight of third parties is a key expectation. If a supplier cannot evidence effective fraud prevention controls, that weakness becomes a legal exposure for the client.
As a result, large organisations are moving away from superficial policy checks. Procurement and legal teams are now asking suppliers to prove that ECCTA-aligned procedures are operational, monitored, and enforced in practice.
How ECCTA is changing supplier contracts
As Failure to Prevent Fraud requirements bed in, standard supplier contracts and renewals are changing. Mid-market suppliers should expect ECCTA-driven clauses to become routine rather than exceptional.
Common requirements now include:
- Mandatory anti-fraud training, with evidence of completion for staff delivering services
- Whistleblowing arrangements that meet UK Failure to Prevent Fraud best practice
- Audit and inspection rights over fraud controls and internal procedures
- Termination rights allowing contracts to be ended if ECCTA reasonable procedures cannot be evidenced
These provisions are increasingly non-negotiable. They exist to protect large organisations relying on the Failure to Prevent Fraud defence and are quickly becoming standard across UK supply chains.
The SME problem: Proving ECCTA compliance
For SMEs, the challenge is rarely willingness. It’s proof.
“Paper compliance” – a static fraud policy, an outdated training record, or an informal reporting channel – no longer meets ECCTA expectations. The Home Office guidance is explicit: Failure to Prevent Fraud procedures must be effectively implemented and enforced.
The difficulty lies in demonstrating that level of assurance without building a costly, manual compliance operation. Many suppliers now find themselves balancing ECCTA third-party risk requirements against the need to stay focused on growth, delivery, and client relationships.
How Trusty helps SMEs meet ECCTA failure to prevent fraud requirements
Trusty is designed for mid-market suppliers that need to evidence ECCTA reasonable procedures in a way that stands up to client, legal, and procurement scrutiny – without slowing the business down.
It bridges the gap between being operationally agile and meeting the level of fraud prevention assurance that enterprise clients now expect from their supply chain.
Instead of relying on disconnected spreadsheets, inboxes, and static policy documents, Trusty provides a single, auditable platform for Failure to Prevent Fraud compliance that stands up to client, legal, and procurement scrutiny.
With Trusty, suppliers can:
- Manage and distribute anti-fraud policies with clear version control and audit visibility
- Deliver ECCTA-aligned anti-fraud training with automated completion and evidence tracking
- Provide a secure whistleblowing channel aligned with Home Office Failure to Prevent Fraud guidance
- Screen sub-contractors and demonstrate that ECCTA third-party risk controls extend across the supply chain
As verifiable Failure to Prevent Fraud compliance becomes a standard requirement in supplier onboarding and contract renewals, documented evidence is replacing declarations of intent. Major organisations increasingly expect suppliers to show not just that policies exist, but that they are implemented, monitored, and enforceable.
Trusty helps SMEs and mid-market firms implement and evidence ECCTA reasonable procedures now, so when governance, risk, and supplier assurance conversations arise – often during contract renewal or onboarding – you can respond with confidence rather than scramble for proof.
Frequently asked questions
Formally it applies to large organisations, but under Section 199(1)(b) a large organisation is liable when an associated person, which can include suppliers, contractors and service providers, commits fraud for its benefit. That is why SMEs are bound in practice through their contracts.
Showing that reasonable procedures to prevent fraud were in place. Home Office guidance makes clear that those procedures include oversight of third parties, so a supplier without evidenced controls becomes a legal exposure for the client.
Mandatory anti-fraud training with evidence of completion, whistleblowing arrangements, audit and inspection rights over fraud controls, and termination rights where reasonable procedures cannot be evidenced.
A static fraud policy, an outdated training record or an informal reporting channel does not meet the expectation that procedures are effectively implemented and enforced. Suppliers need to show that policies, training and reporting channels are operational and monitored.
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