Adequate Procedures, All you need to know about self reporting, Facilitation payments - Written by on Wednesday, March 30, 2011 3:25 - 1 Comment

SFO/DPP Guidance: Facilitation Payment Ban Continues & SFO door remains open

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The SFO and Director of Public Prosecutions have published guidance in relation to the Bribery Act today in tandem with the guidance published by the Ministry of Justice.

In response to the publication of the government guidance Richard Alderman told us today:

“I welcome the Government’s published guidance on the Bribery Act.  The Act is important for the UK and UK business.  While we shall be enforcing the Act vigorously so that ethical businesses do not lose out to others that use bribery and corruption to win contracts, we are still keen to listen to the specific issues that companies have and to work with them to resolve problems pragmatically and fairly.”

The prosecution guidance

Under the prosecution guidance the default position is to prosecute.

The importance of the ‘Full Code Test’ (set out in the Code for Crown Prosecutors) in making decisions on prosecution is emphasised, namely whether there is sufficient evidence for a realistic prospect of conviction and whether a prosecution is in the public interest.

Gifts and Hospitality

The guidance repeats the numerous SFO statements that ‘reasonable, proportionate’ hospitality and promotional expenditure ‘made in good faith [as] an established and important part of doing that business’ will not be penalised.

Facilitation Payments

The ban on facilitation payments continues.  That said, there is useful guidance on some pro’s and cons of particular relevance in assessing whether or not to prosecute bribery offences.

Factors tending in favour of prosecution:

  • Large or repeated payments are more likely to attract a significant sentence
  • Facilitation payments that are planned for or accepted as part of a standard way of conducting business may indicate the offence was premeditated
  • Payments may indicate an element of active corruption of the official in the way the offence was committed
  • Where a commercial organisation has a clear and appropriate policy setting out procedures an individual should follow if facilitation payments are requested and these have not been correctly followed.

Factors tending against prosecution:

  • A single small payment likely to result in only a nominal penalty
  • The payment(s) came to light as a result of a genuinely proactive approach involving self-reporting and remedial action
  • Where a commercial organisation has a clear and appropriate policy setting out procedures an individual should follow if facilitation payments are requested and these have been correctly followed
  • The payer was in a vulnerable position arising from the circumstances in which the payment was demanded

Our view

The guidance will no doubt fall short of the expectations of many who hoped for more, particularly in the context of facilitation payments which both the Government and SFO/DPP guidance confirm are outlawed.

However, we are pleased to see hear from the Director of the SFO that it is “still keen to listen to the specific issues that companies have and to work with them to resolve problems pragmatically and fairly.”

The SFO’s present open door policy is a welcome and commercial approach.  However, we do not anticipate that this approach will continue forever.

We shall interview Vivian Robinson QC General Counsel of the SFO on SFO enforcement of the Bribery Act under the published guidance this afternoon. Sign up here if you would like to join.

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London Calls: UK Bribery Act Guidance is Out! | i-Sight Investigation Software Blog
Mar 31, 2011 6:02

[...] and Richard have published a number of blog posts about the guidance. Their post “SFO/DPP Guidance: Facilitation Payment Ban Continues & SFO door remains open,” includes a list of factors that could lead a company to be prosecuted under the [...]

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