The United Kingdom’s Serious Fraud Office (SFO) has issued revised statements of policy on facilitation payments, business expenditure (hospitality and gifts) and corporate self-reporting that will take immediate effect and supersede previous statements of policy or practice issued by the SFO.
In March 2011, the SFO published the Bribery Act 2010: Joint Prosecution Guidance of the Director of the Serious Fraud Office and the Director of Public Prosecutions (2011 Prosecution Guidance), setting out its approach to decision-making relating to prosecutions of facilitation payments and business expenditure under the Bribery Act 2010 (BA 2010). The 2011 Prosecution Guidance is subject to the Code for Crown Prosecutors and, in the case of potential corporate prosecutions, should also be read in conjunction with the Guidance on Corporate Prosecutions published by the Director of Public Prosecutions, the Director of the SFO and the Director of the Revenue and Customs Prosecutions Office that sets out the extent to which self-reporting by a corporate body is relevant to the decision to prosecute.
Purpose of the Revised Policies
The Revised Policies have been published in order to:
restate and reinforce the SFO’s primary role as an investigator and prosecutor of serious and/or complex fraud, including corruption;
ensure there is consistency with the prosecuting approach of other UK prosecuting bodies; and
to further meet certain Organisation for Economic Co-operation and Development (OECD) recommendations.
The Revised Policies reaffirm that facilitation payments are bribes - for example, where a government official is given money or goods to perform, or expedite, a routine duty. Such payments are therefore illegal under the BA 2010, irrespective of their size or frequency, as they were before implementation of the BA 2010.
The Revised Policies reaffirm expressly the important point that bona fide hospitality or promotional or other legitimate business expenditure is recognised as an established and important part of doing business; and, further, that the intervention of the Revised Policies is not to fetter business. However, the SFO also recognises, at the same time, that bribes may sometimes be disguised as legitimate business expenditure.
The Revised Policies state that the SFO is primarily an investigator and prosecutor of serious and/or complex fraud, including corruption. It is not the role of the SFO to provide corporate bodies with advice on their future conduct. The SFO makes clear that it encourages corporate self-reporting - and will always listen to what a corporate body has to say about its past conduct - but self-reporting will not guarantee immunity from prosecution by the SFO.
Consequently, the Revised Policies further explain, self-reporting must form part of a “genuinely proactive approach” by a corporate body’s management team. In addition, even if the SFO does not prosecute reported violations, it can prosecute unreported violations, and share information on such violations with other law enforcement agencies such as foreign police forces.
Whether or not the SFO prosecutes, instances of BA 2010 violations will always depend on:
the seriousness and complexity of the case, and whether or not it falls within the SFO’s remit; and
the SFO concluding, after applying the two-stage Full Code Test for UK Crown Prosecutors, (i.e., determining whether or not there is sufficient evidence to prosecute, and such prosecution is required in the public interest), that an offence has been committed, and that the offender should be prosecuted.
Where appropriate, and as an alternative or in addition to prosecution, the SFO may use its asset recovery powers under the Proceeds of Crime Act 2002 (POCA) in accordance with the Attorney General’s guidance to prosecuting bodies on their asset recovery powers under the POCA.
The Revised Policies are unequivocal that there will be no presumption in favour of civil settlements in any circumstances, even if corporate bodies were to voluntarily disclose to the SFO instances of violations of the BA 2010. Therefore, the Revised Policies contradict earlier SFO guidance that suggested a more lenient approach may be adopted, e.g., that corporate bodies would be more likely to face civil, rather than criminal, charges if they reported wrongdoing themselves.
In addition, the Revised Policies mark a stark departure from the earlier SFO guidance that allowed for some discretion where a corporate body had an established policy on anti-bribery and corporate hospitality, and took into account the size and frequency of facilitation payments.
Hence, the Revised Policies demonstrate a tougher and more direct approach to combat bribery and corruption by the SFO, and it seems to point to the likelihood that the SFO may initiate more prosecutions in the near future.
For more information on the Revised Policies, please visit:
Serious Fraud Office: revised policy on facilitation payments
Serious Fraud Office: revised policy on business expenditure
Serious Fraud Office: revised policy on self-reporting corruption