A tough new SFO policy means companies need lawyers on their side and rigorous adequate procedures in place.
The Serious Fraud Office (SFO) have recently published a new policy relating to gifts and hospitality, facilitation payments and self-reporting under the Anti-Bribery Act 2010, withdrawing all previous SFO guidance in the process. This policy marks the arrival of the new director of the SFO, David Green CB QC and a tougher approach to enforcement. It is also slams the door firmly shut on the previous director, Richard Alderman's "come and talk" invitation to companies. It is what is being termed as a return to basics with David Green reminding companies that "we are investigators and prosecutors. We are not here to offer advice, to preach or to make moral judgments".
The policy is not particularly revelatory in regards to facilitation payments which remain entirely illegal. A common example of these payments is where a government official is given money or goods to perform (or speed up the performance of) an existing duty. Although one off instances are unlikely to be prosecuted this is not the nature of these types of payments which remain endemic in some jurisdictions. Companies that are not already at zero tolerance for facilitation payments will have to start speeding up their processes and reviewing any payments made that may potentially breach the law.
The SFO have no interest in legitimate corporate entertainment, as David Green says "we are not the Serious Champagne Office". They do remind companies that they are aware that not all hospitality or promotional expenditure is legitimate and may be disguising bribery. The golden rule is, as previously, to keep hospitality proportional to the norms for your particular industry – some industries may be expected to spend more on their events. Anything particularly lavish and out of character, especially if it appears to be focused on one client, customer, foreign public official or business partner, may be picked up on by the SFO. What is crucial for companies to take away from this new policy is that self-reporting by companies no longer guarantees that a settlement will be negotiated civilly with the SFO and criminal prosecution dropped. There is no open door policy encouraging companies to start a dialogue with the SFO. This new stance seems to reflect the opinions of Lord Justice Thomas in the Innospec judgment where he stated that corruption is a top end corporate offence and therefore, a civil resolution will very rarely be appropriate.
All this means that it is more important than ever to have adequate procedures in place. Every month that passes since the coming into force of the bribery Act in July 2011 will mean a decrease in the SFO's tolerance. For those companies who put into place adequate procedures last year and have subsequently crossed compliance off the 'to do list', a health check is in order. Compliance with the Act, in the light of these new policy statements, needs to be meticulous and consistent. Any review will likely benefit from the exacting standards present within the legal industry.
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