Bribery Act & Proceeds of Crime - Written by on Tuesday, December 13, 2011 15:35 - 0 Comments

Wake up call: SFO threatens non-executive directors with search warrants & dawn raids

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The SFO has threatened directors and senior officers with dawn raids.

Yesterday we wrote about the threats made to overseas businesses by the SFO in relation to Bribery Act violations and the recent stories circulating about ENRC.

In the same story the Daily Telegraph reported that allegedly at a meeting demanded by the SFO the SFO threatened to raid the offices of directors and executives if the company fails to co-operate.

The latest statements, if true, are consistent with numerous threats issued by the SFO along similar lines in connection with Bribery Act enforcement.

Speaking recently the Director of the SFO said:

“…There is a new offence that is committed by a senior officer with a UK connection who consents to or connives in bribery.  You may be or you may know people who are senior officers such as Executive or Non Executive Directors of UK or foreign corporations and who have a UK connection.  If you or they know about bribery and decide to do nothing about it, then you or they have connived in bribery.  An offence under the Bribery Act has been committed.  I tell Executives to be very careful not to turn a corporate criminal issue into a personal criminal issue.  It is avoidable.”

In another recent speech the Director of the SFO said:

“What we are also doing is looking at the role of individuals. The Bribery Act has a new offence aimed at senior officers of corporations who consent to or connive in bribery. I know that there are many who are worried about this offence, particularly if they happen to be Directors or Non-Executive Directors based in the UK and where their companies are high risk. You may find, for example, that some London executive or non-executive directors may be worried about their exposure if US corporations are found to have been involved in corruption.

We are actively looking for cases where we can apply this provision. Society expects senior members of a corporation to be responsible for ensuring that there is a true ethical culture.  They have a key responsibility here. My view is that if they find that their efforts to do this meet with resistance or no success then they should consider resigning and telling us about their concerns. Expressing doubts about the company’s culture but remaining a highly paid officer would not be sensible because this would seem to be a model case of conniving in bribery for the purposes of the legislation.”

Non-executive directors are potential targets for the SFO.  Many publicly traded companies with London listings will opt for UK City establishment figures to join their Board of Directors.  The market welcomes such appointments which are seen as adding credibility and good for corporate governance.  The non-executive director’s job is to often to focus on strategic issues while relying upon executive directors to look after the day to day business.

For the non-executive director the prospect of a lucrative directorship is tempting – it is rumoured that some non-executive director positions can command fees up to £250,000.  This sounds like a very large sum of money.  And it is.

But against a backdrop of criminal responsibility for the conduct of corporations many thousands of miles away over which the non-executive has little or no control or knowledge – it may be a small price to pay.

Next year we plan to run a series of free events for non-executive directors geared to equipping the non-executive with information they need to protect themselves.

If this is something which you would be interested in attending please contact

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