Ministry of Justice and Serious Fraud Office stress "proportionate and flexible" approach to UK Bribery Act 2010 enforcement at Clyde & Co seminar.
The Ministry of Justice ("MoJ") and the Serious Fraud Office ("SFO") faced an audience of 100 business leaders in the City when they took part in a seminar on the UK Bribery Act 2010 ("the Act").
At the seminar, hosted by Clyde & Co in London, the audience heard that while the Act is broad in scope, "the evidentiary hurdle for bribery will be high", "sectoral norms will be important" and that "guidance to smaller companies will be provided in considerable detail".
Additionally, the Government does not advocate a 'tick-box approach' to compliance. As such, "variations in corporate structure, sectors, size, markets" would all be considered although none of these is a defence. The Act is "not intended to be prescriptive" and the Government has no intention of cracking down on or penalising legitimate UK businesses.
Richard Alderman, the Director of the SFO, stressed that while his department could not give advance clearance to companies in respect of their business activities the SFO's function is to provide ongoing guidance once the Act comes into force.
Richard Alderman also highlighted three emerging themes for the next 12 months. Firstly, he highlighted the need to curb the supply side of bribery in addition to curtailing demand: "businesses need to work without the threat of bribes". Secondly, the linkage between corruption and money laundering would become stronger in prosecutions. Finally, multi-jurisdictional cases will be amongst the most challenging.
The SFO's approach to enforcement
Vivian Robinson QC, General Counsel of the SFO, outlined the department's approach to enforcement in respect of facilitation payments, corporate hospitality, and the section 7 offence of 'corporate failure to prevent' bribery.
Vivian Robinson QC said that 'paramount question' in respect of facilitation payments is whether the prosecution was 'in the public interest'. To determine this, the SFO would look at the amount of the payment; whether the payment was systemic; evidence that the company had adequate anti-bribery measures; and whether there were any special sector considerations. Likewise with hospitality, a 'common-sense' approach to enforcement will prevail.
In respect of the section 7 offence of 'corporate failure to prevent' bribery, affected companies will need to show they have 'safety nets’ in place. Companies should have clearly defined policies in relation to facilitation payments and corporate hospitality and these should be communicated from 'top to bottom' of any organisation. 'Total transparency’ is critical.
Vivian Robinson QC also noted that any prosecution or civil recovery under the Bribery Act was entirely at the discretion of the SFO. No consent from the Attorney General is required to prosecute or to seek a civil resolution. He warned that the SFO would use the Act to come down hard on companies who fail to put in place adequate procedures to prevent bribery. However, Vivian Robinson QC emphasised that 'self-reporting and self-policing' and 'proof of adequate procedures to prevent misconduct' would be key.
The audience raised questions in relation to whether a joint venture could be considered an 'associated person' and whether requests by a national entity for language and other technical training could be considered 'bribery of a foreign public official'.
In respect of joint ventures, Richard Alderman said that the issue is not one of control but whether the joint venture provides services to the parent company and whether proper due diligence has been done.
On the subject of technical training, Richard Alderman acknowledge that although such cases are "very difficult and fact-sensitive" the test of 'reasonableness' would apply and that again a high evidentiary threshold would have to be met to show misconduct.
A question was raised as to whether to the prosecution of non-UK companies under the Act would always be in the UK public interest. Richard Alderman said that such a prosecution would be in the UK public interest if a UK company was disadvantaged as a result of a non-UK company's breach of the Act.
Clyde & Co lawyer Rachel Cropper-Mawer said: "The SFO highlighted that while it expects the number of investigations that go to trial will be low, it anticipates developing the deferred prosecution options and plea bargain arrangements that are frequently used in the US. In addition, it will turn to civil remedies and anti-money laundering legislation in order to bring prosecutions where necessary."
In relation to directors' liability, the SFO said that turning a 'blind eye' might amount to connivance under the Act. Richard Alderman pointed out that directors would be prosecuted where possible under anti-money laundering legislation which carries a maximum sentence of 14 years in jail.