Financial Services, Sectors - Written by on Tuesday, September 13, 2011 22:57 - 1 Comment

FSA fires another warning shot on Bribery enforcement

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In case there was any doubt after Willis and Aon and the publication of ‘Financial Crime – a guide for firms’ consultation about the FSA’s intention  to be an active enforcer when it comes to anti-bribery measures they dispelled them in this months FSA newsletter.

Entitled the ‘Financial Crime Newsletter’ it states:

“Firms have a full defence for [the failure to prevent bribery] offence [under the Bribery Act] if they can show that they had adequate procedures designed to prevent bribery. The Government has published guidance on these procedures. The FSA does not enforce the Bribery Act. FSMA-authorised firms are under a separate, regulatory obligation to identify and assess corruption risk and to put in place and maintain policies and processes to mitigate corruption risk. We can take regulatory action against firms who fail adequately to address corruption risk; we do not need to find evidence of corruption to take action against a firm. We have consolidated our expectations of firms’ anti-bribery and corruption systems and controls in Chapter 7 of our proposed Financial Crime: a Guide for Firms. Our Guide is consistent with, but separate from, the Government’s Bribery Act guidance. This is because the scope of the Bribery Act is different from our rules and Principles; firms should bear this in mind when reviewing the adequacy of their anti-corruption policies and procedures.” [our emphasis]

As we have previously reported the FSA is also carrying out a thematic review into investment banks’ procedures to contain the risk that staff or agents receive or pay bribes.  This fact is flagged again in this newsletter.

In August we said:

“It is clear that the FSA is an important part of the international enforcement jigsaw when it comes to anti-bribery enforcement.

FSA firms should sit up and take note. At a minimum all FSA firms should ensure that their Adequate Procedures to prevent bribery are robust and do not fall foul of any of the deficiencies identified in previous thematic reviews and cases.”

All FSA firms should familiarise themselves with the recent FSA publication Financial Crime: A Guide for Firms and should ensure that their systems and controls meet the expectations and standards identified in Chapter 7 of the guide.

Do they?

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James Vine (@JamesPSVine)
Sep 14, 2011 4:35

Hmm. The FSA are really wading into the fray here. Could it perhaps be anything to do with the “financial or other advantage” to be gained from a successful enquiry?

Will there be an unseemly scrabble between them and the SFO for future business?

If they can use section 206 of the Financial Services and Markets Act to such good effect, and the SFO use Part 5 of POCA, who needs the Bribery Act? (Gulp)

What impact is this going to have on Private Equity? (see elsewhere on this website as I recall)

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