News & what's on - Written by on Monday, October 1, 2012 13:27 - 0 Comments

OPINION: Confusion must not fill the vacuum following removal of SFO guidance

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Last weekend The Sunday Telegraph reported that the Serious Fraud Office is revising its guidance on Self Reporting, facilitation payments and corporate hospitality.

We reported the corporate hospitality and facilitation payment revisions a week ago. We highlighted the SFO’s intent to update Self Reporting guidance nearly a year ago.

This morning we received this email.

“Hello Barry,

One of the trade mags is saying that there are changes/clarifications imminent to the treatment of corporate hospitality within the Bribery Act guidelines as much confusion still abounds. Do you know about this and what exactly are they likely to change/advise?”

Self Reporting Guidance – no surprise

Avid readers of this website will not be surprised by the revision of the Self Reporting guidance.  We trailed the updating of the new guidance nearly a year ago.  The old guidance was out of date and did not reflect current practice.

Corporate hospitality & facilitation payments

More surprising has been the removal of the SFO guidance on corporate hospitality and facilitation payments.

Both represented pragmatic and effective guidance.  Last year when we were in Houston we were approached by numerous corporates praising the publication of the guidance.  It received a similar reaction in the UK and elsewhere.

David Green QC, the new SFO Director, has gone on record, admittedly with some criticism being meted out, to say that the Serious Fraud Office is not the Serious ‘Champagne’ Office.  Corporates should take comfort from that.

$US5 to expedite a visa is still bribery and we don’t condone it.  But it’s a far cry from out and out, in your face, no questions asked bribery to, for example, win a contract, change legislation or win a licence.  The new Director has said that he will put ‘Serious Fraud’ back into the Serious Fraud Office.

Corporates should take comfort from that too.

Neither of these examples is to say that corporate hospitality can never feature in a prosecution.  It could.

Likewise, facilitation payments could form the cornerstone of a prosecution.

But much will depend, it seems to us, on the context.

Opinion

A lot of water has passed under the bridge since the original self reporting guidance which was out of date. The new guidance should give us the clearest indication so far on the way the SFO, under the new Director, will approach self reporting, prosecution and the resolution of cases going forward.  Given the increasing emphasis on self reporting the revised guidance will be extremely important.

The old SFO guidance on corporate hospitality and facilitation payments represented a pragmatic and practical approach against a backdrop of some uncertainty among companies often fuelled by speculation.

Hopefully the revised position will be published as soon as possible so everyone knows where they stand and we’ll stop receiving emails and questions along the lines of the one above.

We do not expect a sea change of approach from the Serious Fraud Office.

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