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Corporate criminal liability: How the Criminal Finances Act 2017 presents a fresh challenge for English football clubs

Football on stack of coins
Friday, 18 May 2018 By Simon Pentol

In England, all professional football clubs are limited companies (private or public). They are therefore susceptible to corporate criminal liability (CCL). However, the “the identification principle” or “controlling mind test1 (see below) that applies to all criminal offences requiring proof of a mental element (intention or recklessness - as opposed to strict liability offences, such as health & safety) has acted as a procedural bar to prosecuting companies, unless it can be established that any such offence has been committed by an individual who can be identified as a “controlling mind of that company.

The Bribery Act 2010 (BA 2010) punctured the corporate veil by introducing the strict liability corporate offence of failing to prevent bribery. As of 30 September 2017, the Criminal Finances Act 2017 (CFA) has extended corporate strict liability to cover failing to prevent the facilitation of UK (Section 45) and foreign (Section 46) tax evasion by an “associated person” (i.e. an employee, agent or any other person performing services on behalf of the corporate entity).

This article examines:

  • The background and surrounding circumstances to the new regime

    • Legal theory

    • Developments in CCL outside the “identification principle

    • Section 7 The Bribery Act 2010

    • Deferred Prosecution Agreements

    • The direction of travel

  • An overview of CFA 2017

    • Section 45 facilitation

    • Section 46 facilitation

    • The “Reasonable prevention procedures” defence (and HMRC guidance)

  • The implications for football clubs

    • Player’s tax affairs

    • Payments to agents/intermediaries

    • Payments to introducers

    • Image rights deals

    • The crossover between bribery and tax evasion

  • Going forward

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Written by

Simon Pentol

Simon Pentol

Simon is a leading London barrister in the Chambers of Paul Mendelle QC and George Carter-Stephenson QC at 25 Bedford Row. Having spent years leading in numerous high profile cases of serious and organised crime and revenue and corporate fraud, Simon has uniquely developed a parallel practice in the specialist field of Sports-related work.

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