SKP Forensic Update
3 December 2015
UK’s Serious Fraud Office initiates corporate prosecution for failing to prevent bribery offences

UK’s Bribery Act 2010 is regarded as one of the most stringent regulatory structures as it considers both private and public bribery as offences. Furthermore, it also recognises ‘failure to prevent bribery by a commercial organisation’ as a criminal offence (section 7 of the Bribery Act). In the last couple of years, the Serious Fraud Office (SFO) shared a guidance on compliance and also a Code of Practice for Deferred Prosecution Agreements. While there were no specific corporate prosecutions under the Bribery Act since its implementation, the SFO and its officers have been quoted (here) referring to their stand on corporate prosecutions.

In the past week, the SFO initiated two prosecutions under section 7 of the Bribery Act – the first was in relation to ICBC Standard Bank’s conduct in Tanzania and the second was in relation to Sweett Group plc for their conduct in the Middle East. ICBC entered into a Deferred Prosecution Agreement with the SFO with penalties and disgorgement of profits to the tune of USD 30 million (as fine and compensation to the Government of Tanzania).

These incidents represent the SFO’s efforts towards prosecuting corporations for failure to prevent bribery. With UK corporations operating in high-risk geographies and high-risk sectors with reference to corruption perception, it is pertinent for them to consider enhancing their compliance efforts.

Considering the corruption perception in India, efforts towards enhancing compliance may be advisable here as well. These compliance efforts would include:
  • Having a detailed policy on anti-corruption, gifts, hospitality, business promotion and donations;
  • Having a comprehensive compliance program that extends beyond employees to third parties and business partners;
  • Having a due diligence mechanism for hiring third parties;
  • Conducting periodic training for employees, third parties (vendors, service providers, consultants, etc.) and joint venture partners;
  • Conducting periodic risk assessments and compliance reviews to ensure adequate controls are in place to prevent bribery;
  • Having a mechanism for whistle-blowers to report violations and an investigation protocol to gather evidence on violation and taking appropriate action.
You can read more about the Bribery Act prosecutions here:
SFO agrees first UK DPA with Standard Bank
Sweett Group plc admits to bribery offence

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