All you need to know about self reporting, Bribery Act & Proceeds of Crime - Written by on Thursday, December 1, 2011 16:30 - 0 Comments

Hello, Mr Alderman of the Serious Fraud Office is on the line…

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Thinking of the police and Serious Fraud Office investigations?

Images of dawn raids, arrest and search warrants are conjured up.

However raids and search warrants are expensive.  In these straightened times a new, cheaper, strategy is being deployed.

A phone call.

Yes.  Instead of being woken up by uniformed police officers, arrested handcuffed and bundled into the back of a police van as boxes and plastic bags of evidence are taken away, in many cases the approach is a friendly phone call.

On the call the SFO invite the corporate’s executives to a meeting at Elm Street (the SFO HQ) to discuss a ‘problem’.

At that meeting they are encouraged to undertake an internal investigation and following that investigation, which will to some degree have been directed by the SFO, to (self) report their findings. This approach of placing the burden on the corporate to pay for an investigation into itself is not dissimilar to the US system.

There is precedent in the ‘UK’ system for companies paying for the privilege of investigating themselves.  In the UK if a problem is ‘self reported’ the corporate will, broadly speaking, pay to investigate itself.

There is also precedent in UK overseas territories.  In Bermuda, under Section 132 (2) of the Bermuda Companies Act: “All expenses of and incidental to the investigation shall be defrayed by the exempted company unless the Minister otherwise directs.”

The SFO still threatens the spectre of the dawn raid.  Indeed in an article on Mike Koehler’s website FCPA Professor in an article written by the Director of the SFO he said:

In other cases we think that approaching the corporate is not appropriate – perhaps because of the size and systemic nature of the alleged corruption, the involvement of very senior people, or the potential for evidence to be destroyed. In that sort of case we may well decide to proceed quietly with our investigation. So the first that the corporate will know of our interest is likely to be when we arrive at its door with search warrants – the worst possible outcome for any business.”

However, in these straightened times a new approach to corporate investigations is not only more collaborative and consensual. It is also an economic necessity against a backdrop of a shrinking SFO budget.

Image © Crown Copyright 2011

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