Following a slow start, there has been a flurry of activity in prosecuting under the Bribery Act.
First conviction under new Act
The Crown Prosecution Service has acted quickly to secure the conviction of Munir Patel. Patel was a clerk at Redbridge Magistrates Court and was found guilty of accepting a bribe of £500 in exchange for omitting the details of a driving offence from a court database. Patel was secretly filmed by a national newspaper agreeing to accept the payment.
Patel will be sentenced on 18 November. There is no suggestion that the payer of the bribe is to be prosecuted.
This case serves as a warning to individuals and businesses that the authorities have every intention of enforcing the Bribery Act.
SFO won't look a gift horse in the mouth
In the last few weeks details have emerged that an SFO investigation has been launched following the release of information by British born Michael Woodford, former chief executive of Olympus, following his dismissal from the company.
The investigation is said to relate to payments made during the acquisition of the UK medical equipment supplier Gyrus in 2008. It is alleged that a payment of $687 million was made to a Cayman Island company in relation to "advisory fees" which amounted to more than a third of the total price of the deal.
Whilst full details of the allegations and investigations remain unclear at this stage it is clear that the SFO will welcome a whistle-blower with open arms, whether it be a disgruntled employee or a competitor.
This has been confirmed by the launch by the SFO of a new fraud and corruption whistle-blowing service, SFO Confidential.
You wait for one and four come along
An international businessman Victor Dahdaleh was arrested and charged on 24 October with offences under the old bribery legislation. It is alleged that suspicious payments were made to officials of a state owned smelting company in Bahrain, in connection with aluminium contracts.
Then, on 25 and 27 October 3 former executives of Innospec Limited were arrested and charged with offences of conspiring to make corrupt payments to public officials in Indonesia and Iraq to secure contracts for the supply of Innospec's products.
These prosecutions show that the old legislation can and will provide the SFO with the tools it needs to pursue investigations in relation to offences committed before 1 July 2011. Individuals and businesses would be naïve to believe that any problematic activities arising as new compliance policies and procedures are rolled out, can be swept under the carpet and forgotten.
The next twist in the News International scandal
Authorities have now started an investigation into the alleged inappropriate payments by employees of News International to police officers.
A man, confirmed to be an employee of News International, has been arrested amid allegations that payments of up to £130,000 were paid to police officers in return for information. Given the scale of the alleged activities of The News of the World, we will watch this space with interest.
It's best to be civil
In July, the SFO obtained an order from the High Court for the recovery of over £11 million from Macmillan Publishers in relation to the proceeds of corruption by its Education Division in Africa.
An attempt had been made by an agent to pay a sum of money to secure the award of a World Bank funded tender to supply educational materials in Southern Sudan. The company self-reported to the SFO.
Macmillan avoided criminal prosecution by complying with the SFO's published protocol for dealing with overseas corruption. Following this initial investigation, Macmillan conducted further detailed investigations into its activities in three African countries and overhauled its internal anti-corruption policies and procedures with the help of external consultants.
A speech by the Serious and Organised Crime Department (SOCD) in Scotland has provided important guidance on its bribery self-reporting initiative.
The initiative began on 1 July 2011 and will continue for 12 months. It is aimed at encouraging companies to self-report if any conduct is uncovered within their organisation where there are concerns that the conduct may amount to an infringement of bribery laws.
A benefit of self reporting is that the crown may show leniency to businesses and consider passing the case to the Civil Recovery Unit to reach a civil settlement, rather than pursuing a criminal prosecution. However, there is no guarantee that leniency will be offered and that certain offences are likely to be viewed as "too serious" to be dealt with by civil settlement alone. A further message from the SOCD is that businesses must undertake a thorough internal investigation before considering self-reporting. The SOCD has rejected a number of applications to self-report on the basis that the internal investigation was not sufficiently detailed to allow the SOCD to reach a view on the appropriate course of action.
If any suspicions or concerns arise in relation to any activities within a business, it is essential that the company fully investigates the issues with support from legal advisors before any approach is made to the authorities. As noted above bribery could and does occur everywhere. Businesses should ensure that they have robust policies and procedures in place to prevent bribery and in the unfortunate event that a bribery offence is committed, senior management should understand what they need to do to investigate and protect the business and its employees.
If not already in hand, companies should be carrying out a risk assessment, developing or reviewing their policies and procedures and rolling out training. For further practical guidance on what your business should be doing to address the risks posed by the Bribery Act please contact Catriona Munro.
You may also be interested to know that MMS has developed an innovative online anti-bribery compliance system to help companies to stay within the law. We can also provide bespoke face-to-face training for clients.
For further information, please contact:
0131 228 7121
0141 271 5730
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This briefing is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to any particular matter.