Adequate Procedures, All you need to know about self reporting, Construction, Extractive (incl. oil & gas), Long arm jurisdiction - are you subject to the law?, Medical (incl. medical device & pharma), MENA (Middle East & North Africa), Money laundering - Written by on Friday, April 1, 2011 0:08 - 1 Comment

Newsletter: A lot more than just Bribery Act guidance – our essential round up of the year so far

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The publication of the government guidance is the big news story of the week but it would be a mistake for the publication of the Bribery Act guidance to eclipse other significant developments this year.

In our Newsletter we round up the most significant developments of the year so far including the Bribery Act guidance.

VERY IMPORTANT: Debarment NOT mandatory on conviction of failure to prevent offence

We are surprised that few people picked up on the important point that debarment from EU contracts will be discretionary (NOT mandatory) for a violation of the failure to prevent bribery offence in Section 7 of the Bribery Act.  Omitted from the guidance and the written statement accompanying it sent from the Ministry of Justice on Wednesday the point was buried in Kenneth Clarke’s written statement to the House of Commons.

We reported it in our top takeaways on publication of the guidance on Wednesday.  After questions we received on the provenance of our Wednesday statement we published the statement in full last night from Hansard on our website.

Tip:

The closer to compliance a corporate is the more likely a court will exercise the discretion not to impose a mandatory debarment.  Companies should take steps now to implement Adequate Procedures to prevent bribery.

 The publication  of the guidance:  Bribery Act will be law from July 1

Richard Alderman spoke to us about his reaction to the publication of the guidance. He told us:

“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.”

Over coming weeks we’ll be deconstructing it on www.thebriberyact.com and investigating what it really means.

We wrote about our key takeaways from the government guidance here and distilled the prosecution guidance here.

Tip(s):

Companies should finalise their steps to put in place Adequate Procedures now.

We caution overseas companies on the apparent restriction of the ambit of the Act in their case.  The guidance stresses that UK courts will ultimately decide. As we have said before UK courts have indicated a very low threshold in the context of what constitutes carrying on business in the UK.  We can help you assess risk.

There remains a window of opportunity to engage with the SFO about problems and challenges in the context of compliance.  We welcome their approach of engagement.  However, with the passage of time we expect the attitude of the SFO to harden.  If you are concerned about challenges your business faces we would be happy to speak with you.

Interview with Vivian Robinson QC

On the same day as the publication of the government guidance and the prosecution guidance we interviewed Vivian Robinson QC, General Counsel of the Serious Fraud Office about the SFO’s views on the guidance.

Tip:

It’s a mandatory listen.  To hear it click here.

Watch out Directors in jeopardy

 Charles Forsyth former managing director and David Mabey former sales director were jailed at Southwark Crown Court after each was found guilty of involvement in a corrupt kickback deal involving the sale of bridges to Iraq.

Sentencing HHJ Rivlin QC said: “The bare truth of this case is that Mr Forsyth bears the most culpability….When a director of a major company plays even a small part, he can expect to receive a custodial sentence”. [our emphasis]

 Tip:

Senior officers are at risk under the Bribery Act.  However, this is a very clear statement that statutory directors will have no sympathy from the courts if convicted and should expect a custodial sentence.  What greater motivation could there be to set the tone from the top on the ban on bribery?

It’s the Proceeds of Crime Act stupid

 The SFO obtained an Order for M.W. Kellogg Limited to pay just over £7 million. The High Court made the Order under Part 5 of the Proceeds of Crime Act 2002.

We have been saying for months that the Proceeds of Crime Act will be used in the context of the Bribery Act. It is a powerful weapon in the armoury of the SFO.  As Richard Alderman said earlier this month:

“…there is a link to money laundering. Speaking for the SFO, we have tended to concentrate on corruption offences by themselves. What we have been doing recently though and I certainly see this developing much more in the future, is to make the important link between corruption and money laundering. We are starting to do this in cases. I expect to see far more of this work in future. I expect us to follow the money against a range of individuals and organisations so that all of those involved in corruption and the laundering of corrupt monies are dealt with by prosecution or through some other way. It seems to me that there is a very great deal of potential in this area.”

 Tip:

If you have a suspicion of bribery it is likely that self reporting obligations under the Proceeds of Crime Act are triggered.  If you have any concerns about bribery you should seek legal advice as soon as possible.

 Unrest in Africa – are you at risk?

 At the time of writing Libya is in turmoil, Egypt and Tunisia have undergone regime change and Yemen is on a knife edge.

Before the dust has settled a priority for new regimes is to discredit their predecessors and highlight their corrupt activities at the same time revealing those who they dealt with.

Richard Alderman has highlighted the risk to companies:

“I expect as well that the changes we are witnessing each day in various countries will also lead to more corruption being exposed. We may well learn far more about what corporations have done in order to secure contracts than we ever knew before.”

 Tip:

If you believe your business may be at risk as a result of the turmoil in Africa please let us know.

 It’s not just the Bribery Act: Don’t forget the international angle

 On Friday 11 March Jeffrey Tesler a London based solicitor entered a guilty plea under a plea agreement in the US to bribery charges and agreed to forfeit US$148,964,568.67.

The charges relate to bribes paid in Nigeria though some of the conduct took place in the UK including a meeting at an unspecified London Hotel where negotiations took place on the amount of bribes to be paid.

Tip:

This is a good example of the long arm jurisdiction of the United States and serves to illustrate the importance of understanding the international jigsaw of anti-corruption laws.

And finally…Drum roll

In the coming weeks we shall be running seminars and masterclasses around the country.  We shall be publishing details of the seminars and masterclasses next week.

Our masterclasses will be sector specific, and largely based in London, and to kick off with, focussing on: 

  • Manufacturing (including Pharmaceutical and Medical Device) 
  • Construction and real estate
  • Defence Oil & Gas – extractive industries
  • Information Technology and Media
  • Financial Services

Tip:

We will have limited spaces for our seminars and sector masterclasses and have already received requests to attend.  If you would like to register your interest please get in touch as soon as possible.  Our seminars will be nationwide and general.

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Compliance Bits and Pieces for April 1 | Compliance Building
Apr 1, 2011 5:02

[…] UK Justice Minister Says They are too Busy to Prosecute Under the Bribery Act […]

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