The first Deferred Prosecution Agreement (DPA) was approved today by Sir Brian Leveson, the President of the Queen’s Bench Division at Southwark Crown Court sitting at the Royal Courts of Justice. See Legal update, First DPA approved (Crown Court) and Legal update, First deferred prosecution agreement hearing in court on Monday.
The agreement is with Standard Bank Plc (now known as ICBC Standard Bank Plc) and relates to the activities of a subsidiary in Tanzania. The case is not only the first DPA but also the first case of an offence under section 7 of the Bribery Act 2010 going before a criminal court, which penalises a failure by a company to prevent corruption.
The terms of the DPA include:
- compensation and interest to the Tanzanian Government of $7million,
- disgorgement of profits of $8.4million,
- a fine of $16.8million
- the Bank commissioning and submitting and paying for an independent review of its existing internal and anti-bribery corruption controls by PWC,
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.
Why was this case chosen?
This case was considered by the SFO to be a safe one to put before the court for a DPA. This was because:
- The offence involved a single transaction rather than widespread and long-term criminal conduct.
- 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 since overhauled its compliance programme and is a very different organisation (with a different name) to the one that committed the offence.
For these reasons it falls within the guidelines for a DPA contained in the DPA Code of Practice. It was also clearly in the interests of justice for there to be a DPA, and that the terms of the DPA were fair, reasonable and proportionate. See Practice note, What factors will the prosecutor consider before negotiating a DPA?.
There will be much interest in this first DPA and the SFO have been under a great deal of pressure to get it right. By both the SFO and the Judge closely following the criteria set out in the DPA Code of Practice companies will be encouraged to come forward at the earliest opportunity to self-report to avoid a prosecution and consequently protect its shareholders and reputation.
A second DPA is expected before the end of year. Watch this space!