All you need to know about self reporting, Bribery Act & Proceeds of Crime - Written by Barry & Richard on Monday, January 23, 2012 16:37 - 0 Comments
SFO Director on Self Reporting guidance – under review & opinions sought on formal investigations
In November we wrote that the SFO Self Reporting guidance was due for an update to reflect current practice.
One specific question which has recently arisen relates to co-operation from corporates who have self referred to the SFO.
What happens if the corporate cannot and does not fully investigate the problem. Would the SFO to conduct its own investigation?
Will the SFO consider that the corporate has not co-operated with its investigation? If so would it behave sympathetically to the corporate which had self reported?
Typically in a Self Referral ideally a corporate will undertake its own investigation. The present SFO guidance states:
“Wherever possible, this investigation will be carried out by the corporate’s professional advisers. This will be at the expense of the corporate. We undertake to look at this in a proportionate manner and to have regard, where appropriate, to the cost to the corporate and the impact on the corporate’s business.”
We asked the present Director of the SFO, Richard Alderman his views.
Are there circumstances in which the SFO would commence its own investigation when the company is investigating following self referral? If so would this have an impact on the SFO’s assessment of the company’s level of co-operation?
Richard Alderman, Answer
The SFO has been considering this in circumstances in which material evidence cannot be obtained by the company but is within reach of SFO powers. The SFO would be concerned about the impact on the company’s reputation if a formal investigation were commenced and would want to discuss this with the company before doing so. The SFO would also want to discuss with the corporate wherever possible any timing issues as they arise (such as public statements and court proceedings).
Provided that the material was genuinely unavailable to the company, the SFO would continue to give full credit to the company in those circumstances. This scenario has not arisen in a particular case yet but the SFO has been considering it.
The SFO is interested in views from corporates and advisers on whether this could happen and if so how the reputational issues for the corporate could be handled. It might be that further paragraphs might need to be added to the SFO Guide on self reporting.
The SFO position is a common sense stance. It would be grossly unfair for a corporate to be penalised for failure to investigate in circumstances where it is unable to do so through no fault of its own.
In addition to answering the specific questions posed by the SFO Director now is a good time to feed back any other thoughts on the SFO Self Reporting guidance.
Image © Crown Copyright 2011