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International

Compliance Policy. Check. Training Check. Job Done? Not so much.

Many companies do not enforce policies and it is the failure of management and leadership to take them seriously.  Time and time again I get the impression they don't care so much if third parties are paying bribes and that they tend to look the other way. Many companies take position if I don't know about it I'm not responsible for it and will not probe too deeply.  But that attitude catches up.  In the real world the sales executive knows exactly what is going on. It is hard to keep your self in dark without opening up liability to wilful blindness. said Jeff Knox, Fraud Chief of the DoJ at the recent C5 8th Annual Conference in London. Under the FCPA, a person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if the person: is aware that is engaging in such conduct, that such circumstance ...

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Sectors

F is for Fail. Three strikes &…firm with ABC controls gets slammed by FCA and fined.

Last week the Financial Conduct Authority fined Besso an insurance firm for poor anti-bribery systems and controls. It had some and had even paid solicitors to advise it on them. The FCA view.  Not good enough. In a withering Final Notice issued the FCA said: "The anti-bribery and corruption systems and controls that it had were expected to be commensurate with that relatively low level of risk.  However, Besso failed to meet even that standard. . But. Besso did have controls. Besso paid a law firm to advise it and provide suggestions for policies and procedures and Besso’s program evolved and improved over time. What went wrong? Besso is a medium-sized broker in the wholesale insurance market, whose business did not the FCA found, overall, pose a high bribery and corruption risk. In its notice the FCA catalogued the warnings given to Besso. Its failure to heed those warnings ultimately led to the fine for a system and control failure. Strike One ...

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News & what’s on

Another SFO success. Bruce Hall sentenced and subject to aggressive use of UK money laundering laws by SFO.

The SFO had another success yesterday... Bruce Hall a witness in the Dahdaleh trial which collapsed late last year was given a prison sentence for his part in a corruption scheme.  It was previously reported that in the wake of the collapsed Dahdelah trial Mr. Hall wished to withdraw his guilty plea. That did not happen. Mr Hall was charged with the following corruption offences in February 2012: Conspiracy to corrupt contrary to Section 1, Criminal Law Act 1977 and Section 1, Prevention of Corruption Act 1906. Corruption contrary to Section 1, Prevention of Corruption Act 1906. Acquiring and transferring criminal property contrary to Sections 329(1) and 327(1) of the Proceeds of Crime Act 2002. He pleaded guilty on 27 June 2012 to the first charge above, namely that of conspiracy to corrupt.  The additional two charges that Mr Hall did not enter pleas for will lie on file and will not be proceeded with. Mr. Hall was ...

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Bribery Act & Proceeds of Crime

OPINION: Light at the end of the tunnel & a review of the last 12 months from David Green QC

Introducing the Annual Report for the SFO in the last financial year David Green, CB QC, Director of the Serious Fraud Office had this to say: "Since I took up post in April 2012, we have sharpened the strategic focus of the SFO on the casework for which the Roskill model was designed and intended. This is the topmost tier of serious and complex fraud and bribery. Consequently: (i)            We are undertaking fewer but much larger and more complex investigations. Examples include LIBOR, Rolls-Royce, Barclays/Qatar, ENRC, Alstom, G4S Serco. (ii)          We have expanded our analytical and intelligence capability, and currently have significant pre-investigation projects in development. (iii)        At the other end of the pipeline, we had 11 cases involving 34 defendants charged and awaiting trial as at 31 March 2014. In the reporting year 2013-14 we have had 8 prosecutions of 18 defendants either concluded or in progress. The conviction rate by defendant was 85%. All of ...

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Your Questions: Answered

A purchaser worries about liabilities after buying a business with limited information up front

Dear Barry & Richard, Will my company and my Board of Directors likely be prosecuted if they buy another company which has problems after doing limited due diligence? My company is considering buying a business.  Unfortunately, we are unable to do much due diligence in advance of the sale as we will have to buy in an auction.  The seller, has various interested potential purchasers, and has set up a data room.  There is limited opportunity to ask more questions and anyway the deal must be done in a couple of weeks.  We don't have much time to do any meaningful due diligence. Barry & Richard answer What you describe is a common problem.  We are frequently asked to help businesses in similar circumstances to your own.  As you say there is a limit to the due diligence that you can do in cases like this. Under the old Director of the SFO there was ...

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