Cross-border criminal justice post-Brexit – Operation Yellowhammer
The first Deferred Prosecution Agreement (DPA) was approved today by Sir Brian Leveson, the President of the Queen’s Bench Division. The agreement is with Standard Bank Plc (now known as ICBC Standard Bank Plc) and relates to the activities of a subsidiary in Tanzania. As well as being the first ever DPA, the case also breaks new ground since it is the first case in which a company has been brought before the courts for an offence under Section 7 of the Bribery Act 2010, which penalises a failure by a company to prevent corruption.
The terms of the DPA involve compensation and interest to the Tanzanian Government of $7million, disgorgement of profits of $8.4million, and a fine of $16.8million, together with costs. In approving these elements of the agreement, the Judge was following guidelines issued by the Sentencing Council concerning corporate criminality for fraud and fraud-related offences.
There were a number of features of this case which made it a very safe one for the SFO to bring before the courts. In particular, the offence involved a single transaction rather than widespread criminality. It was reported to the SFO by the Bank as soon as it was discovered. The Bank then cooperated fully in the subsequent investigation. It has now overhauled its compliance processes and is a substantially different organisation to the one that committed the offence.
These factors bring the circumstances four-square within the guidelines for when a DPA is appropriate, which are contained in the DPA Code of Practice. It is no surprise therefore that Sir Brian Leveson had no difficulty in approving the DPA and in particular finding that it was in the interests of justice for there to be a DPA, and that the terms of the DPA were fair, reasonable and proportionate.
There has been a considerable amount of interest in what the first DPA would look like. It is encouraging that this first agreement does reflect so closely the criteria laid out in the DPA Code of Practice. This is likely to encourage companies to step forward and self-report in the future, with greater certainty as to the likely outcome now that there is a precedent in place. DPAs carry with them the great advantage that a company can avoid a prosecution. In turn, this limits the impact on innocent shareholders and third parties. We can expect that further DPAs will reflect the cautious approach adopted by the SFO for this first case. The second DPA is expected by the end of the year.
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