Bribery Act & Proceeds of Crime - Written by on Thursday, September 1, 2011 7:06 - 7 Comments

A golden rule: Never. Underestimate. Your. Opponent. Or, why it is a mistake to Pooh Pooh the 1st Bribery Act case

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Yesterday’s news on the charging of Mr. Patel with Bribery Act offences provoked a slew of comments the gist of which could be summed up as ‘after all the hype – this is all we get’ and ‘so what’.

The forthcoming (Mr. Patel’s case is yet to be heard) prosecution was ‘pooh pooh’d’.

That would be a mistake.

‘So what’ or ‘pooh pooh’ misses a fundamental but important difference between the US FCPA and the Bribery Act.

The UK Bribery Act covers domestic bribery AND foreign bribery.  The US FCPA only covers foreign bribery.

Broadly speaking foreign bribery cases are likely to be more complicated from an evidential perspective.  They will, as a result, take longer to investigate and prove.

This is the raison d’etre for the Serious Fraud Office in the UK.

On the other hand, domestic bribery is more likely to be straightforward.

In spite of the criticism of the antiquated anti bribery laws in the UK before the Bribery Act the truth is that there were (and shall continue to be in relation to bribery before July 1) always cases under the old laws along the lines of the facts alleged in the prosecution of Mr. Patel.

Yesterday’s prosecution will have two consequences which are likely to impact businesses and the Bribery Act practically and legally.

SFO Pressure

First, pressure on the SFO to be seen to take swift action will increase.

After the hullabaloo around the Bribery Act and the numerous pronouncements on the subject by the SFO it is the hitherto largely silent Crown Prosecution Service which has laid the first charges.

The FSA has also staked its territory when it comes to anti-bribery enforcement.

Do not bet on the Serious Fraud Office sitting idly by.  The chances of a ‘spectacular’ SFO investigation and sooner rather than later just rose.

Be careful what you wish for

Second, we shall see jurisprudence on the Bribery Act and the meaning of some of the provisions of the Bribery Act very quickly as less complex domestic bribery cases are brought and decided relatively quickly.

This is set against a backdrop of some criticism that the Bribery Act needed further clarification.

Precedent set in these cases will dictate the impact of a significant part of the Bribery Act for commercial organisations and their senior officers.

The jury is out on the whether the result will be good news or bad news on the interpretation stakes.

But. Contrast this with the US.

In the US with a dearth of cases brought to court but plenty of agreed settlements after over 30 years on the books the ambit of the FCPA is largely what the DOJ says it is…


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Sep 1, 2011 7:34

As one of the pooh-poohers, let me say that I agree with everything you’ve written. With the FSA and the CPS both bringing bribery cases, the pressure on the SFO will only increase. That, in a nutshell, is the problem.

Why is there no coordination here? This is important stuff. The world is looking to the UK to see how they’re going to enforce their own “FCPA on steroids.” And what have we gotten so far? A bribery case that never alleges an actual bribe, and a bribery case that frankly doesn’t deserve the front page, or any page. That the agencies don’t talk to each other is frankly the better of the options.

Because if they’re talking to each other, the lack of strategic vision is staggering. Do they just not realize the political importance of the “first UK Bribery Act case?” The SFO is now going to have to bring a HUGE case to make up for it.

Barry & Richard
Sep 1, 2011 12:35

Hello Howard – As usual…we are in violent…agreement.

To be fair the prosecutors don’t have the luxury of choosing what lands on their desk. It’s early days for a case. The Act only came in on July 1 at which point everyone promptly disappeared on holiday, investigators, prosecutors, bribers and bribees.

It is a surprise that there is anything this early on. That it is a fairly prosaic domestic bribery case is just the luck of the draw.

As to the FSA – they are a bit like the SEC. They do co-ordinate with the SFO when they find something. Just like books and records offences the FSA don’t actually need to show a bribe.

So, while the first case may not be the Bribe Inc. in Bribistan crowd pleaser some had hoped for make no mistake that that is coming.

In the meantime, the use of the Bribery Act so early by the CPS is a warning shot. Some have said that the Bribery Act will be a legal backwater. This case would tend to suggest that they are wrong.

From small acorns…

James Vine (@JamesPSVine)
Sep 1, 2011 13:06

This is becoming a bit of a mutual glee club!
There was I bemoaning the fact in the last bungblog that the Bribery Act was the preserve only of the rich and famous, and along comes this.
We wont go into any of the details, which might of themselves explain a little more behind this decision, (think “Systemic”) but is it really possible that we might end up following the Indian lead on Bribery, (popular that is rather than political) and see this as the acorn of the cultural change the OECD have been advocating for years?
Small bribery can be just as insidious as Big Bribery, but it is much less likely to be prosecuted for one very good and compelling reason, which is…. described in this coming weekend’s
Sorry, I gatecrashed, I know…. but we are all on the same side here I think.

Tom Fox
Sep 1, 2011 13:47


No doubt inspired by Howard Sklar I have to take the contrarian view. To prosecute a lowly clerk for 500GBP bribe seems to me to be far short of what the British government intended for the robust law to encompass. It is sort of like pulling over a motorist for going 5 mph over the speed limit as others are racing along the same motorway. Or to use another analogy, there has been one prosecution in the US for all the fraudulent lending which led the the current financial crisis. And it was against a borrower, not one of the financial institutions which got us all into this mess. I will leave aside the issues of turf wars and cooperation or lack thereof between the SFO, FSA and CPS for others to debate. To have the most robust anti-corruption law in the world and this is it? I know we are 60 days into the law but if this is the first warning shot, to quote Mr. T, “I pity the fool.”

James Vine (@JamesPSVine)
Sep 1, 2011 23:33

Hi Tom
As you will appreciate now someone has been charged and is before the courts, UK law is very firm on the fact that there should be no media comment on the details, unlike the US! (viz DSK).
There was no perp walk here, just some over the top reporting in the Sun, a News Int paper that conducted the sting.
There will be further comment after case is over, but you’ll just have to wait and see.
In the meantime I shall be standing outside the door at Southwark CC next month with selling tickets!

The Bribery Act: “Government Keen To Accept Bribes” « thebungblog
Sep 3, 2011 7:59

Scott Simmons
Sep 8, 2011 8:24

Dear All,

I must say that I am quite astounded by the general comments regarding the first case. You are equating the application of this law to a disappointing film after so much hype. Are you possibly suggesting that this first case should not go ahead because it doesn’t have enough razzmattazz? It has always been my understanding that the law is the law and if you break the law, you break the law. Whether you drive 5 miles over the limit or 50, you have broken the law. As Barry and Richard rightly pointed out, the CPS do not get to choose which cases come their way. The type of bribery you all seem to be craving takes months and months of investigation and was not going to be brought within the first two months of the Act being introduced.

I also do not remember reading that the Act gave some kind of de minimis to the type of bribery that would lead to conviction. To me, this is the perfect first case. Leave the SFO to find that summer blockbuster of a case and, while we all wait, people can see that no matter how much you offer or take, whether it be £10m or £5, a case will be brought against you if there is sufficient evidence. Better that ten small cases be brought against people before ‘the big one’ than we read in the newspapers that the police dropped charges against those alleged to have committed/taken bribes because of pressure to find that big case first!

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