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SFO gets tough on bribery

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Are you up to date with what you can and can’t do with corporate hospitality and the Bribery Act 2010?

Recently the Serious Fraud Office (SFO) has withdrawn its earlier guidance on Bribery and Corruption. This includes the guidance that companies self reporting any corruption would face civil penalties rather than criminal prosecutions.

This has left companies in a position where they need to closely consider their options should they find themselves in a position where bribery is discovered within their organisation. There are now guarantees that self reporting will result in civil penalties. The SFO now simply states that self reporting may be taken into account but each case will turn on its own facts. It does not rule out civil penalties where there is evidence of a proactive approach to complying with the legislation by management teams.

There has been further guidance issued on corporate hospitality too which may come as somewhat of a relief to businesses providing a clearer picture of what they can and can’t do.

The SFO has stated that “Bona Fide hospitality or promotional or other legitimate business expenditure is recognised as an established and important part of doing business”. Having said that the SFO has perhaps firmed up its guidance on what they call “Facilitation payments”. These are payments made to a public official to speed up measures needed to be taken or ensure their compliance. The SFO states now simply “A facilitation payment is a type of bribe and should be seen as such”.

It is also important when considering the new guidance to consider the potential effects of the recent government announcement that deferred prosecution agreements (DPAs) are to be made available for economic crime.

This is a move towards a more U.S. style of prosecuting financial crime which would allow prosecutors to have an effective tool to tackle this according to the Ministry of Justice. This is proposed in the draft Crime and Courts Bill and it is anticipated that DPAs may be used in Courts by 2014.

The suggested format would be to allow the voluntary reporting of crime in return for an agreement that any prosecution is deferred until stringent conditions have been complied with. The DPAs would be made in open Court and if the conditions are satisfied there will be no prosecution.

What remains clear is that the SFO and other prosecution agencies are committed to stamping out bribery and corruption in the corporate world together with the tackling of economic crime. It is important that you protect your business from falling foul of these measures and ensure you take expert advice. If you find that your business is the subject of an enquiry it is vital that early advice is sought in order to limit the damage and to ensure the best possible outcome.

By associate solicitor, Rachel Adamson

We have a team of experts in this field and we are available to give advice at any time in complete confidence. If you wish to discuss any matter please call Rachel Adamson or Sean Joyce on 01616 966 229.