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Harry Cassin
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Andy Spalding
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Jessica Tillipman
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Richard L. Cassin
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Elizabeth K. Spahn
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Cody Worthington
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Julie DiMauro
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Thomas Fox
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Marc Alain Bohn
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Bill Waite
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Russell A. Stamets
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Eric Carlson
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Compliance Alert: Due diligence under the UK’s Criminal Finances Act 2017

The most important thing for a company to remember when dealing with the  Gross Human Rights Abuse provisions of the Criminal Finances Act is that they appear to be designed as a strict liability regime with no statutory defenses available.

In addition, both the National Crime Agency and Crown Prosecution Service have the mandate to pursue potentially lucrative (for the state) and public relations friendly Gross Human Rights Abuse cases.

Due diligence programs for Gross Human Rights Abuse must contain both retroactive and forward-looking aspects. This is because the Criminal Finances Act applies retroactively to Gross Human Rights Abuse involving torture, up to 20 years from the date of implementation (likely later this year).

The first step is for companies with assets in the UK to properly identify potential human rights violators in their supply chain. Companies may wish to start by reviewing their business dealings since 1997 in which there is a reasonable likelihood of the transactions being “connected with” torture. Some cases of torture may be easily identified from public source documents or the media; others will be harder to detect. The investigatory work of journalists or civil society organizations will be of special relevance to any review as this may be the starting point for prosecutors.

Companies should also identify those current business relationships that pose a meaningful risk of becoming connected with a Gross Human Rights Abuse. This list should receive a deeper review, covering not only torture, but also cruel, degrading or inhuman treatment.

Companies may be able to narrow down their search by identifying business partners that might involve public officials. The risk of profiting from Gross Human Rights Abuse is at its greatest when transacting with companies who have access to the tools of the state (such as police) to retaliate against protected individuals. The presence of state officials among business partners should thus raise red flags.

Finally, if a company is unfortunate enough to identity a Gross Human Rights Abuse with which it is connected, it may wish to consider proactively investigating the allegations. This will help the company beat civil society to the punch, and will demonstrate a good faith effort to mitigate any potential violations.

Due diligence programs cannot be everywhere at once. However, they should seek to catch information about violations before or soon after journalists or activists report on them. For both public image and liability purposes, it is better for the company to have already caught the violation and begun its own mitigation processes before prosecutors have notice of the violation and begin building a case.

Looking forward, to minimize risk, companies should introduce a due diligence program designed to identify potential human rights violators in their supply chains. Once again, the work of civil society and journalists will be incredibly useful here. Special attention should be paid to any stories of retaliation against whistleblowers, as they were of particular concern to Parliament.

Our prior posts in this series are here. We’ll conclude with a post about how to respond to potential Gross Human Rights Abuse violations.


Richard J. Rogers is a founding partner at Global Diligence LLP, a London-based law firm specializing in international law and human rights compliance. It offers a wide range of services to companies operating in high-risk zones to help ensure compliance with international standards. He can be contacted here

Sasho Todorov is a third year Vanderbilt law student and an intern at Global Diligence. He can be contacted here.

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