International - Written by on Thursday, October 14, 2010 13:10 - 0 Comments

The friendly ear of the UK’s Serious Fraud Office

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In a recent speech The Director of the Serious Fraud Office (SFO) Richard Alderman made clear that he sees the SFO’s role in enforcing the Bribery Act as being to support the business of ethical corporates. Why should unethical organisations benefit through corrupt practices used to ensure the acquisition of contracts succeed at the expense of those corporates acting properly.

This position reflects the law and is a principle that is hard to argue against. The difficulty for corporates is the reality of the business world in high risk sectors or areas of the world.

In recognition of these practical difficulties the Director of the SFO has made clear that whilst he recognises that the Bribery Act will be the toughest anti-bribery legislation in the world and that he intends to vigorously enforce its provisions he is seeking to ensure that the SFO is engaged with and assisting the business community over the complex issues they face in complying with the Act.

In practice what this means for businesses is that the SFO are clearly stating that they are willing to engage in a dialogue with corporates who are seeking to ensure that they have a sufficiently robust ethical anti-corruption culture to comply with the requirements of section 7 of the Bribery Act, namely the new offence of failing to prevent bribery.

Richard Alderman, the Director of the SFO, has specifically recognised that this willingness by the SFO to engage, review and participate in the efforts of corporates to design and implement ethical ant-bribery policies includes accepting that whilst some corporates may already have a “gold standard” anti-corruption culture and be interested in advice on risk assessment many others may only just be starting the journey.

In his speech he said:

“There may be others for which a Code of Conduct in itself is a step forward because they have hardly started on the journey to an anti-corruption culture. We recognise that what is important here is that the journey has started and that there is a genuine commitment. This is to be commended.”

He also also said that corporates should feel able to come and talk to the SFO when they encounter problems.

This message is echoed by the tone and message of the SFO’s General Counsel, Vivian Robertson QC. It is clear that the SFO are seeking to adopt the role of an “approachable regulator”. This approach by the SFO is potentially of great value to all corporates endeavouring to come to terms with the requirements of the Act. It will be useful to be able to ask focused questions concerning areas of policy and implementatation and to obtain the view of the SFO in relation to ‘adequacy’ of proposed measures to combat corruption.

This approach also means however that the SFO will have a clearer mandate to take action against corporates who fall short of the ‘adequate procedures’ defence in the future. Those who are thought by the SFO to have failed to identify or implement an ethical policy and have not taken up the offer of assistance in this area are likely to pass through the “public interest in seeing a prosecution” test with greater ease.

This very modern stance adopted by the SFO is both an indication of a willingness to assist but also a clear sign that they intend to enforce the legislation with vigour where appropriate. We would suggest that before engaging with the SFO that you liaise with counsel. That said, the SFO is looking to engage with corporates in a constructive and useful dialogue. This is a welcome break from the past and is to be applauded. Image © Crown Copyright 2010

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