Two senior officials at the SFO gave speeches at the 33rd Cambridge Symposium on Economic Crime.
The Director of the SFO, David Green CB QC provided an overview of the work of the SFO. Most of his speech covered well worn ground, but perhaps two substantive points emerged:
- The Director anticipated that at least two deferred prosecution agreements (DPAs) will be completed before the end of 2015.
- He hinted at approval for a change in the law of corporate liability, moving away from the identification principle and embracing something closer to vicarious liability.
We wait for the announcement of the first DPA settlement in England & Wales.
The second point would be a departure from traditional criminal corporate liability in England & Wales, where a company can generally only be prosecuted if those responsible are sufficiently senior to represent the identity of the company. This is perhaps a surprising departure considering the previous year saw the SFO secure their first conviction of a corporate entity, Smith and Ouzman, for a bribery offence.
It should also be noted that the Director gave his support to an extension of section 7 of the Bribery Act, to include failure to prevent fraud, at the 32nd Symposium. This appears to have made little progress and was not mentioned.
The SFO’s General Counsel, Alun Milford spoke about the prosecutor’s perspective on compliance. He acknowledged that compliance in respect of criminal law was largely an issue arising from the Bribery Act, and made four substantive points:
- Firstly, it was reconfirmed that the SFO would not be offering any “safe harbour” or even general guidance on what adequate procedures means, and that any guidance would only be considered after the event.
- Secondly, Mr Milford stated that the well-publicised guidance is something that the SFO have in mind when investigating cases. This was a clear reference to the Ministry of Justice Guidelines and mention was also made of OECD and Transparency International publications.
- Thirdly, Mr Milford addressed the recent decision of the Department of Business, Skills and Innovation (“BIS”) to consult with SMEs on the substance of the Bribery Act by making it clear a defence of “the price of doing business in certain jurisdictions” will be taken adversely by the SFO.
- Finally, perhaps in response to the commercial concerns of the third point, Mr Milford advised those losing out on business to a bribe paying company to let the SFO know about it.
Mr Milford’s speech was aimed at addressing two key concerns for companies under the Bribery Act 2010: that available guidance as to adequate procedures is not definitive, and that the argument, never made explicitly but often hinted at, that it is impossible to obtain commercial business in some parts of the world without paying some form of bribe.
In respect of the former, the position remains that companies demonstrating they have applied the necessary guidance to their anti-corruption policies, including taking account of the various industry and expert guidance, are in a much better position to defend an accusation of “failure to prevent” than ones who do not. It appears difficult for a prosecutor to demonstrate either stage of the Code for Crown Prosecutors has been met if a company has faithfully attempted to put in place reasonable anti-corruption procedures.
Finally, the SFO could never credibly turn a blind eye to corrupt activity in a particular jurisdiction. Letters were sent by BIS to industry leaders in July 2015, inviting them to comment on whether the Act had an effect on their attempts to win business in export markets. A director of the CBI stated:
“With the majority of other countries’ (anti-corruption rules) more flexible than the UK, some businesses are being put at a competitive disadvantage when operating in global markets”.
In this respect, the SFO has once again aligned itself with the OECD and TI.