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The 2nd July 2012 marked the first anniversary of the Bribery
Act coming into force. The Act sets out four main offences:
offering a bribe, receiving a bribe, bribery of a foreign official
and a corporate offence of failing to prevent bribery. If a
corporate body commits any of these offences senior employees may
face prosecution where the bribing activity occurs with their
consent or connivance.
To date, there has only been one
prosecution under the Act; a high profile arrest as part of the
News International Operation Elveden investigation. Yet earlier
this year the Director of the Serious Fraud Office (SFO) mentioned
that over 20 corporations have self-reported incidents of
bribery. So why are there no corporate convictions?
The Act is not retrospective. For there
to be any prosecutions the offences would have to have been
committed in the past year and been uncovered (whether by means of
internal whistleblowing, self-reporting or detection by the
relevant authorities) before proceeding to trial. The wheels of
justice turn slowly so it's not a surprise there is yet to be a
corporate prosecution under the Act.
In the past year there have been some
very high profile convictions in relation to bribery and corruption
offences which were committed before the Act came into effect; for
example, the Ł8 million Sainsbury's potato trial. There is a natural lag time
between an offence being committed before it comes to trial and we
expect to see Bribery Act corporate prosecutions coming to trial in
the not too distant future.
Another factor is that the SFO has
suffered from Government budget cuts which will reduce resourcing
of investigations. The Serious and Organised Crime Division in
Scotland (SOCD) has its attention diverted by other areas within
its remit, including drug and people trafficking, money laundering,
counter-terrorism and bootlegging. Much will depend on whether the
SFO and SOCD are supported in their efforts and are given the
budgets required to investigate and bring prosecutions.
The self-reporting period, where
companies were encouraged to disclose incidents of bribery and
corruption within their organisation in return for potentially more
lenient treatment, has come to an end. The Government is currently
consulting on the proposed adoption of US style deferred
prosecution agreements (DPA).
As part of a DPA, companies publicly
admit to economic crimes, such as bribery and corruption. They meet
tough sanctions, including payment of substantial fines, and
compliance with strict internal reforms, such as implementing
extensive compliance programmes, appointing monitors and submitting
regular audits. The whole process is overseen by a judge to ensure
it is fair, and in the interests of the public interest and of
justice (see our previous e-update
here).
Enforcement agencies will be aware that companies may not
resource compliance programmes in the absence of any prosecutions.
The new Director of the SFO said, at a conference last week, that
the first corporate cases under the Act are not intended to be
headline grabbing but will be prosecuted for the 'right
reasons' and will inevitably encourage companies to understand
that the Act has serious consequences. The risk is present and, in
our opinion, due to become reality very soon.
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
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The right of a person to discuss certain matters with their lawyer, no matter how nefarious, without fear of their confidence being broken is one that has been recognised since the 16th Century.
The ramifications for those found to be in civil contempt (as presided over by the High Court), and, in particular, the court’s power to enforce such a finding against a contemnor who resides overseas, are more far reaching than many (civil) lawyers realise.
The Bribery Act has made the news again following the conviction of a would be taxi driver. Earlier this week, at Minshull Street Crown Court in Manchester, Mr Mawia Mushtaq became the second person convicted of an offence under the Bribery Act by attempting to bribe a Licensing Officer.
In the previous edition of Corporate Focus we reported that the Bribery Act 2010 (the Bribery Act) came into force on 1 July 2011 and we considered procedures that commercial organisations could put into place in order to prevent bribery.
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