A proposed new offence targeting businesses that fail to prevent fraud or money laundering could be the most significant shakeup in corporate criminal law in a century, specialist lawyers have said.

The Ministry of Justice announced last week that it will consult on proposals to extend the scope of the ‘failure to prevent’ criminal offence beyond bribery and tax evasion to other economic crimes.

Barry Vitou, head of global corporate crime at international firm Pinsent Masons, told the Gazette that the plan was a ‘massive shift’ from the current position as reflected in the Bribery Act 2010. He added that the proposed new offence would be far more wide-ranging.

He said: ‘Section 7 [of the Bribery Act] was a game-changer in 2010/11 and the government is now proposing to introduce it for other economic crimes. If it goes ahead it would represent the biggest shakeup in corporate criminal law that we have seen.’

Almost two years ago the government said it was considering introducing the offence, but quietly dropped the plan last September.

Vitou said the new proposal would be unlikely to suffer the same fate because it was announced as part of the prime minister’s package of measures to tackle corruption at last week’s high-profile summit in London.

Will Christopher, a civil fraud partner at London firm Kingsley Napley, said the proposed offence would ‘certainly add to [Serious Fraud Office chief] David Green’s prosecutorial toolbox’.

But John Whittaker, a partner at international firm Clyde & Co, warned that the cost of implementing anti-money laundering procedures could lead to UK businesses ceasing operations in high-risk jurisdictions or with high-risk companies or individuals.

He said: ‘In effect, the cost of those procedures will be borne by commerce and the outcome will be that many companies will need to spend significant funds on preventative measures even when perfectly legitimate funds are not linked to any criminal activity.’

Law Society president Jonathan Smithers said: ‘While in principle we support further legislative measures to get tougher on financial crime, it’s equally important to ensure the Serious Fraud Office is armed with the resources it requires to pursue complicated cases against large financial services companies.’

Last week’s anti-corruption summit also heard of government plans to require foreign companies buying or owning property in the UK to disclose their beneficial owners, as well as proposals to make public procurement more transparent.