All you need to know about self reporting, Bribery Act & Proceeds of Crime - Written by on Tuesday, July 24, 2012 0:01 - 1 Comment

Spot the difference – 8 Ingredients for a Civil Recovery Order

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In 2009 the Serious Fraud Office Published guidance on its approach to overseas corruption.  In a world of limited resources, broadly speaking, the guidance dangled the carrot of a civil (instead of criminal) outcome in cases of overseas bribery and corruption following a self report to the SFO.  The guidance said:

“We have encouraged business and professional advisers to self report cases of overseas corruption to us.  This guidance explains our policies on this and in particular on the benefits to be obtained from self reporting.  As will be seen from this guide, the benefit to the corporate will be the prospect (in appropriate cases) of a civil rather than a criminal outcome as well as the opportunity to manage, with us, the issues and any publicity proactively.”

Guidance is useful, but the proof of the pudding is in the eating – especially when the guidance was penned by the last Director of the SFO.

The good news is that the Civil Recovery Order agreed by Oxford University Press matter confirms that under the new Director Civil Recovery Orders are still on the menu.

Self Reporting alone is not a guarantee for a Civil Recovery outcome.  SFO press releases in relevant cases highlight a series of relevant factors, including Self Reporting. SFO Director David Green CB QC said:

“This settlement demonstrates that there are, in appropriate cases, clear and sensible solutions available to those who self report issues of this kind to the authorities.  The use of Civil Recovery powers has been exercised in accordance with the Attorney General’s guidelines.  The company will be adopting new business practices to prevent a recurrence of these issues and these new procedures will be subject to an extensive and detailed review.”

New ingredients & a new menu for a Civil Recovery Order

The SFO set out in some detail the rationale for the entry into the Civil Recovery Order in this instance as follows:

“a)    The test under the Code for Crown Prosecutors in relation to the case meeting the criteria to prosecute has not been met at this point and there is no likelihood that such a standard would be met in the future.  This view is based on a number of factors including, but not limited to, (i) key material obtained through the investigation is not in an evidentially admissible format for a criminal prosecution and (ii) witnesses in any such prosecution would be in overseas jurisdictions and are considered unlikely to assist or co-operate with a criminal investigation in the UK.

b)    Difficulties in relation to obtaining evidence from the jurisdictions involved and potential risks to the personal welfare of affected persons.

c)     OUP has conducted itself in a manner which fully meets the criteria set out in the SFO guidance on self reporting matters of overseas corruption.

d)    There is no evidence of Board level (or the equivalent) knowledge or connivance within OUP in relation to the business practices which led to the case being referred to the SFO.

e)    The products supplied were of a good standard and provided at ‘open market’ values.  This means that the jurisdictions involved have not been victims as a result of overpaying for the goods or as a result being supplied goods which were unsuitable or not required.

f)     The resources needed to facilitate an investigation into this matter are considerable e.g. 12 terabytes of data collected as part of the investigation, and a civil recovery disposal allows a better strategic deployment of resources to other investigations which have a higher probability of leading to a criminal prosecution.

g)     The settlement terms ensure all gross profit from any tainted contract will be disgorged.

h)      OUPEA and OUPT will be subject to parallel World Bank procedures which will result in them being debarred from participating in future World Bank funded tenders for a number of years.

The old menu

Comparing these elements with the reasons given justifying the entry into of a Civil Recovery Order in Macmillan (a similar example) - the SFO also identified eight factors, though there are material differences in them – with the Oxford University Press press release setting out a much more detailed rationale – a helpful step. The eight ingredients in Macmillan were:

A number of relevant features, which have informed the resolution of this enquiry include the following:

  1. MPL approached the SFO with a view to co-operation;
  2. MPL had fully co-operated with the SFO throughout the process and complied with an agreed timetable;
  3. MPL had fully complied with other authorities including the World Bank Group;
  4. The Company had, in response to learning of the allegations of bribery and corruption, reacted appropriately in firstly, reviewing its internal anti-bribery and corruption policies and procedures, appointing external consultants to recommend and help implement an internal appropriate anti-bribery and corruption compliance regime;
  5. As a result of the parallel World Bank Process the company has been debarred from participating in World Bank Funded tender business for a minimum period of three years. In addition, the Company has taken the decision to cease all live and prospective public tenders in its Education Division business, in East and West Africa regardless of the source of funds;
  6. The Company, as a result of withdrawing from the sector lost significant revenue including surrendered bid securities;
  7. The actual products supplied were of a good quality; and
  8. There was no material identified to support a conclusion that the products supplied were overpriced.”

Spot the difference.

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Coffee Talk Shop… » Blog Archive » High Tide: From Out on Bail to Cutting Spending
Jul 25, 2012 13:55

[...] The FCPAProfessor asks if a noteworthy Supreme Court case even matters. Thebriberyact.com tries to spot the eight clues that lead to a civil recovery [...]

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