International - Written by on Tuesday, November 20, 2012 16:56 - 0 Comments

Our 5 cents. Gold: DOJ/SEC Silver: SFO Bronze: CPS? & who you gonna call?

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It is worth spending time analysing where the SFO are heading and where that leaves us all.

We, like you, are concerned with the real problems faced by business in dealing with complex issues including instances of bribery and the need to review and at times tighten corporate governance amongst many others.

With the appointment of David Green QC the SFO has set course to revert to its original purpose: to be a serious prosecuting authority prosecuting serious corruption.

Frankly it is hard to argue with that.  Except of course for those who are in favour of no investigation and prosecution of Serious Fraud including bribery.

The new Director is on record saying that there is not a sign outside the offices of the SFO saying “Free Advice Inside”.

We are aware that some corporates now lament, for example, the withdrawl of the procedure outlined in the Original Self Report guidance relating to pre-acquistion advice.

And yet.  We know that in practice this procedure was hardly ever, if ever used. So.  Not exactly a massive loss.

The truth is that some people will never be happy. The truth is also that the SFO culture has changed. This change is intentional and the SFO is re-positioned.

Two nations divided by a common language?

We could all get hung-up on arguments about the merits of the US system in being able to ask for an ‘Opinion’ from the DoJ as to the legality of a proposed practice, prior to putting it in place.

Likewise, we could remark upon the fact that DoJ has for the first time published ‘Guide-Lines’ in this area.

But we won’t (much).

While many have applauded the new guidance others have been quick to criticise the guidance for being a self serving statement of the law as the DOJ interprets it – there being only two cases contested by corporate defendants in the FCPA’s 35 year history.

Those who argue the FCPA is a panacea should acquaint themselves with the concerted effort on the part of US business to amend the FCPA to make it more like the United Kingdom’s Bribery Act in the last year or so.

An attempt which is widely acknowledged to have stalled after a principal funder of the effort found itself subject to….*AHEM*….a massive FCPA investigation…

But these theoretical niceties are irrelevant to those of us who inhabit the real world (although sometimes it feels like a lonely place…).

It is academic to a board of Directors faced with a real problem and real decisions about what to do.

David Green may be right when he points to the fact that the US have a history of dealing with these cases which has led to a wealth of understanding as to how things will be likely to go and we have not.

Whatever it is that motivates, the simple fact is that the ‘unilateral gloss’ placed upon the Guidance issued to UK PLC by the SFO has been removed.  Our advice on this.  Keep calm and carry on.

Cut to the chase

What has not changed in all of this is one simple thing.

A self- report, a genuine self -report, one  where the SFO did not know about whatever is the subject matter of the report, followed by genuine and diligent action to put the position right is still a very powerful  factor for consideration by the SFO when deciding whether to seek to prosecute to conviction.

Don’t take our word for it, take his.

David Green stated this in clear terms before the Parliamentary committee.

He has also said it to us.

How do you Self Report

The question of procedure on a self -report was raised directly by us with the Director.

The response:

The SFO sees no reason to change the system at the present time, it worked well.

It remains the case therefore that self-report is recognised as being a very important factor when the full Code Test is applied relating to whether it is in the Public Interest to seek to secure a conviction.

SFO

As the SFO are now to prosecute only the ‘serious’ cases it will be the CPS who are to prosecute the cases which do not meet the criteria.

The stripping away of the SFO’s unique guidance brings all prosecutors into line.

The SFO has a relationship with business, it comes with the turf.

In the US the DoJ do write ‘Opinions’ and it is everyone’s right to seek one, large or small.  They (and the SEC) do receive self-reports.

The SFO have stated that they will receive self-reports and engage in a meaningful way with those reporting.

The CPS?

The CPS have no point of contact, no relationship.

Perhaps this is the burning question.

We will report further once we know more.

Wrapping it up

But.

Perhaps all this can all be summarised taking a leaf out of the book of quotes from Winston Churchill:

“We cannot forecast to you the action of the CPS, the SFO or indeed the DOJ and the SEC. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is public interest.”

And if you want to know what some experts think the public interest is likely to be?  Phone us.

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