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Government considering tougher laws in crackdown on 'corporate economic crime'

The Government is eyeing tougher laws to crack down on "fraudulent, dishonest activity" by some banks and corporations.

The Ministry of Justice (MoJ) says current laws leave enforcement agencies struggling to prosecute businesses for crimes like fraud, false accounting and money laundering.

It is now launching a consultation that will look at whether rules requiring law enforcement agencies to prove that businesses are complicit in the criminal wrongdoing of their staff is actually hindering successful convictions.

The consultation comes in the wake of cases like the Libor scandal that saw former UBS trader Tom Hayes handed a jail sentence for manipulating the key interest rate at which banks lend to each other.

While Mr Hayes was held to account in an English criminal court, the bank was not prosecuted in the UK since the Serious Fraud Office (SFO) did not have enough evidence to prove that a person identified as a so-called "directing mind" at the bank was party to Mr Haye's conduct.

The ministry will consider stronger regulations and whether to implement alternative laws like those which make companies guilty through the actions of their staff, as well as a model that leaves businesses liable unless they can prove steps have been taken to prevent the crime.

The MoJ said it was the latest government move to try "repair trust in business and improve accountability".

Justice minister Sir Oliver Heald said: "Corporate economic crime undermines confidence in business, distorts markets, and erodes trust.

"Companies must be held to account for the criminal activity that takes place within them.

"I want to restore public faith in business and make sure we have the right tools available to crack down on corporate criminality."

The consultation will run until March 24 2017.

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