UK: Recent UK Enforcement Actions Highlight Broad Range Of UK Anti-Corruption Laws

Last Updated: 25 August 2011
Article by David S. Lorello and Fiona Laurence

The UK's Bribery Act 2010 came into force on 1 July 2011, following a long period of government consultation.1  However, UK authorities have been bringing enforcement actions with some regularity over the last two years, employing a variety of different tools.  Two recent UK enforcement actions, summarised in this alert, highlight the different legal strategies available to UK authorities to bring penalties against individuals and companies for corruption-related infractions, separate from the Bribery Act.  These strategies will continue to be available alongside the new Bribery Act, and thus must be taken into account by companies that carry on business in the UK when evaluating the nature and scope of their UK anti-corruption risk exposures and compliance programs.

FSA £6.9 Million Fine Against Willis Limited

On 21 July 2011 the UK Financial Services Authority ("FSA") imposed an administrative fine of £6.895 million on UK insurance broker Willis Limited, arising from alleged failures on the part of Willis to maintain an effective anti-corruption compliance program.  The penalty was imposed pursuant to the Financial Services and Markets Act 2000 ("FSMA"), and associated regulations.  The FSMA applies to financial services providers, including banks and insurers who are regulated by the FSA.

Section 206(1) of the FSMA provides that:

"If the Authority considers that an authorised person has contravened a requirement imposed on him by or under this may impose on him a penalty, in respect of the contravention, of such amount as it considers appropriate."

The Willis action represents the second case where the FSA has brought an enforcement action for deficiencies in anti-corruption compliance programs, following the FSA's £5.25 million fine against Aon Limited in January 2009, and is one of the largest FSA fines on record.2  The ultimate fine against Willis reflected a 30% discount under the FSA's executive settlement procedures, in recognition of Willis's active cooperation with the FSA and its agreement to settle the matter early in the FSA's investigation.

The FSA exercised its enforcement authority in the Willis matter under section 206(1) of the FSMA, which provides that:

"If the [FSA] considers that an authorised person has contravened a requirement imposed on him by or under this may impose on him a penalty, in respect of the contravention, of such amount as it considers appropriate."

The FSA determined that Willis Limited had breached the following:

  • Principle 3 of the FSA's Principles for Businesses3, which provides that:

"A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems"; and

  • The FSA's Senior Management Arrangements, Systems and Controls4 sourcebook which provides that:

"A firm must take reasonable care to establish and maintain effective systems and controls for compliance with applicable requirements and standards under the regulatory system and for countering the risk that the firm might be used to further financial crime."

The FSA found that between January 2006 and December 2009 Willis made payments totalling £27 million to overseas third party sales representatives, who assisted Willis in winning and retaining business from overseas clients, particularly in high-risk corruption jurisdictions. The FSA found that Willis failed to implement several anti-corruption safeguards in connection with those third parties, and in particular:

  1. Willis did not adequately document the services provided by some of its external providers with only brief descriptions in support of commission payments being given in many cases (such as "introducer" or "producing broker");
  2. Willis did not ensure that adequate due diligence was carried out on third party representatives to evaluate the corruption risks that the role might entail, particularly in high-risk jurisdictions;
  3. Willis did not regularly review its relationships with its sales representatives to confirm whether it was necessary and appropriate to continue the relationships; and
  4. Willis did not adequately train staff on anti-corruption issues, or ensure that improved anti-bribery and corruption policies and guidance, introduced by the company in August 2008, were fully implemented.

Notably, the FSA did not conclude that Willis had acted in a deliberate or reckless manner.  However, given that Willis would have been aware of bribery and corruption risks associated with making payments to obtain or retain business, particularly in high- risk jurisdictions, the FSA found that additional steps should have been taken to monitor the adequacy of procedures.   The FSA noted, in particular, that Willis was on notice of the risks of failing to maintain adequate compliance programs given the FSA's "Dear CEO" letter to the insurance brokering industry in November 2007 (which highlighted the corruption risks that insurance brokers face), and the FSA's January 2009 fine against Aon Limited. 

On the other hand, the FSA acknowledged that Willis has taken steps to address the alleged deficiencies in its program, and the FSA also recognized the company's efforts to conduct a thorough internal review of its past payments to third-party representatives in conjunction with its remedial efforts. Those and other factors contributed to the 30% penalty reduction assessed by the FSA under its executive settlement procedures.

£11.3 Million Fine Against Macmillan Publishers Limited Under Proceeds of Crime Act, Following Referral From World Bank

In an unrelated matter, on 22 July 2011 the UK Serious Fraud Office ("SFO") settled an enforcement action against Macmillan Publishers Limited ("MPL"), resulting in a High Court order for MPL to pay £11.3 million in a civil recovery action, under Part 5 of the Proceeds of Crime Act 2002.  The civil recovery is in recognition of sums which MPL allegedly received through bribery-related misconduct relating to sales of educational products in East and West Africa.

The SFO's initial enquiry arose following a World Bank investigation into allegations of corruption by MPL in connection with sales in a World Bank-financed project in Sudan.   The World Bank debarred MPL for three years from participating in Bank-financed projects under the World Bank's Sanctions Procedures. 

The SFO-mandated review was, notably, considerably broader than the World Bank investigation (which focused only on World Bank financed projects).  The SFO required MPL to conduct a broad internal review of its books and records – at the company's own expense – with a view toward identifying corruption-related risks.  The first phase of the SFO-mandated review led to a further, more detailed review of three jurisdictions – Rwanda, Uganda, and Zambia – where potential bribery and corruption risks were evident.  Throughout the process, the SFO worked in collaboration with the World Bank, as well as the City of London Police. 

In view of evidence disclosed through the MPL investigations, the SFO concluded that certain of the contract awards (which often were conducted through public tenders) were "susceptible to improper relationships being formed and corruption taking place". The SFO thus concluded that MPL may have received revenue that had been derived from unlawful conduct.  Accordingly, although the SFO findings may not have supported a prosecution under the existing UK anti-bribery laws, the SFO elected to pursue a civil recovery under Part 5 of the Proceeds of Crime Act, which provides a broad authority to recover, in a civil action, property that represents the proceeds of unlawful conduct. 

The SFO took into account a number of factors in determining its position on settlement with MPL:

1.MPL cooperated fully with the SFO and other authorities including the World Bank;
2.Once informed of the allegations of corruption, MPL responded appropriately by reviewing its internal anti-bribery and corruption policies and engaging external consultants to assist in the implementation of these policies;
3.The SFO recognized the World Bank's decision to debar MPL, as well as MPL's decision voluntarily to cease all live and prospective public tenders in its Education Division in East and West Africa, and the loss of prospective revenue which this caused.

The SFO settlement included a requirement that, for a period of one year, MPL submit to an external monitor, who will report to both the SFO and the World Bank.  This is consistent with the SFO's tendency in other recent enforcement actions to require an independent monitor as part of corruption-related settlements. 

Strikingly, according to the SFO press release announcing the MPL action, the SFO spent only £27,000 in pursuing enforcement against MPL.  This sum highlights the SFO's potential to leverage internal investigatory work by companies in achieving enforcement results, and will be cold comfort to many commentators, who have suggested that the SFO's limited enforcement budget for Bribery Act cases (approximately £2 million per year) will inhibit the SFO's ability to enforce UK anti-corruption laws.


The Willis and MPL enforcement actions are informative in four respects:

  • Multiple Statutory and Regulatory Enforcement Tools. Both the FSMA and the Proceeds of Crime Act provide administrative or civil enforcement alternatives, with potentially broader standards and lower evidential thresholds than the Bribery Act (which is a criminal statute).  Much attention has been given in recent months to parsing the provisions of the Bribery Act in relation to potential corporate liabilities.  Although those discussions are certainly important, companies should not lose sight of the fact that other statutes are available to UK enforcement authorities to penalise corruption-related activity.
  • Internal Controls Requirements. The Willis action in particular illustrates the importance of implementing and maintaining anti-bribery policies and controls. Although the Bribery Act does not expressly require companies to implement internal controls (in contrast to the U.S. Foreign Corrupt Practices Act, which contains books and records requirements for publicly-traded companies), FSA Principle 3 does contain an affirmative internal controls requirement.  Even companies which are not in the financial sector (and thus are not regulated by the FSA), accounting controls requirements exist in the general UK corporate laws (such as the Companies Act) and could be used to support enforcement actions.
  • Guidance on Best Practices. The FSA's Final Notice in Willis provides a detailed discussion of the FSA's views on what a compliance program should include (in particular, in the context of third-party due diligence and monitoring).  Accordingly, although the FSA notice does not address the Bribery Act, it can serve as useful guidance for UK companies which are seeking to develop their anti-corruption compliance programs (complementing the UK Ministry of Justice's Bribery Act "adequate procedures" guidance, issued in March 2011).
  • World Bank / International Financial Institution Enforcement and Referral Risk.  The MPL enforcement action arose following a World Bank investigation and referral.  The World Bank and other international financial institutions have been increasingly active in investigating corruption-related misconduct in contracts which those institutions finance, with significant consequences for breaches, including long debarment periods, cross-debarment by other international financial institutions, and (as the MPL case highlights) national enforcement authority actions.


1. For background on the Bribery Act, please see our alerts dated 12 April 2010, "UK Parliament Passes Anti-Bribery Reform Law" and 30 March 2011, "UK Ministry of Justice Publishes Guidance to the UK Bribery Act; Announces Act to Enter into Force on July 1 2011".

2. See our alert of 21 January 2009, "UK Financial Services Authority Fines Aon Limited £5.25 Million For Failing to Maintain Adequate Anti-Bribery Controls".

3. See PRIN 2.1.1R in the FSA Handbook

4. SYSC 3.2.6R

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions