As today marks International Anti-Corruption day, Áine Kervick presents a year in review to reflect key milestones and developments in this field.
The SFO in 2014-2015: The SFO conviction rate over the year was reported to be 78% by defendant with 18 defendants in 9 cases successfully prosecuted. 16 new investigations were opened in the year (including Forex, Tesco and the Sweett Group) with major investigations concerning LIBOR, Rolls-Royce, GlaxoSmithKline, Barclays Bank, ENRC and GPT making progress. The SFO reported £26.5million in confiscation orders with a recovery of £13.7m. Since this report, an investigation was opened in relation to Soma Oil & Gas and David Green gave evidence to Culture, Media and Sport Committee that the SFO were looking into Fifa in relation to outstanding matters which “touch upon” money-laundering.
International Corruption Unit: The new International Corruption Unit (ICU) was launched in August as the central point for investigating international corruption in the UK. In July, David Cameron described corruption as “one of the greatest enemies of progress in our time” and revealed plans for an Anti-Corruption Summit in 2016.
Unexplained Wealth Orders: Following on from the Prime Minister’s speech, “Anti-Corruption Champion” Sir Eric Pickles advocated his support for Unexplained Wealth Orders. There is every indication that corruption is going to be a big focus for the Government in the year to come. How this rhetoric plays out in practice will be something to watch in 2016 but we expect a significant increase in money laundering and bribery cases and a higher likelihood of prosecutions for individuals involved in corruption.
The “Yates” Memo: In September, we saw the publication of the Yates Memo in the US. The DoJ issued guidance to Federal Prosecutors in which it set out six steps to strengthen DoJ efforts to pursue individuals for corporate wrongdoing. It remains to be seen whether this will have an impact on the UK where the guidance is already clear that prosecution of a company is no substitute for prosecution of individuals.
Ministry of Justice decision to drop failure to prevent economic crime offence: Speaking on 28 September 2015, Justice Minister Andrew Selous said that ministers had decided not to carry out further work on proposals for extension of the section 7 offence to cover economic crime because “there have been no prosecutions under the model Bribery Act offence and there is little evidence of corporate economic wrongdoing going unpunished”. We will wait to see if this work is reopened in 2016 following the recent flurry of activity in relation to the section 7 Bribery Act 2010 offence. However, given George Osborne’s indications that “the age of banker-bashing” is coming to an end, the Government’s focus seems to be working with businesses to become “part of a solution” which may shelve any plans for a new economic crime offence. The Director of the SFO is still keen to change the way in which companies can be held liable for acts of their employees.
Section 7 Settlement in Scotland: The Crown Office entered into a civil settlement with a company that self-reported for failure to prevent bribery. The civil recovery order was for £212,800. Civil recoveries in England and Wales are increasingly rare; the SFO now preferring to use prosecution or DPAs as solutions to conclude their cases.
The SFO’s first Deferred Prosecution Agreement: The first Deferred Prosecution Agreement (DPA) was approved on 20 November 2015. The agreement is with Standard Bank Plc (now known as ICBC Standard Bank Plc) and relates to the activities of a subsidiary in Tanzania. This was also the first time section 7 of the Bribery Act 2010 has been used successfully to bring a company to court for failure to prevent corruption. Sir Brian Leveson confirmed that the penalty calculated should be “broadly comparable” to the fine that the court would have imposed if the company pleaded guilty (the Bank received a 1/3 reduction to the penalty in line with this consideration).
Coming shortly after the DPA’s announcement, we also saw that Sweett Group plc admitted an offence under Section 7 of the Bribery Act 2010 regarding conduct in the Middle East. The company has yet to be sentenced.
There have been reports of many companies contacting the SFO in relation to agreeing a DPA given the greater certainty Sir Brian Leveson has provided as to what can be expected under the DPA guidelines in terms of cooperation. The SFO has made clear that a limited waiver of privilege will be expected as part of any cooperation package in the future. This is likely to be a contentious issue for 2016.
You can find out more about the Criminal Law team's work relating to Bribery and Corruption here.