International - Written by on Sunday, January 13, 2013 4:52 - 1 Comment

*IT’S BEHIND YOU!* Our review of 2012 & 2013 – Unlucky for some

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Are Board Directors are sleepwalking to prison?

Let history be the judge, or so they say.

On the one hand 2012 saw more investigations, arrests, prosecutions and convictions on the other it saw corporate hospitality dropping 30% and anti-bribery awareness continuing to rise.

Yet, against that back drop a worrying trend of complacency is emerging.

As the pantomime season in the UK draws to a close – it’s that time of year again and we thought we’d take a look in the rear mirror at 2012 and combine it with our first Newsletter of 2013.

What’s in a year?

Last year we predicted:

  • an increasing focus on international companies with increasing DOJ cooperation
  • targeting of individuals
  • increasing use of UK money laundering laws – we flagged the message coming from the SFO that it expected corporate shareholders to adopt a pro-active stance in relation to their investments
  • an overhaul of the Self Reporting guidance
  • a more aggressive SFO with a greater emphasis on prosecution under the new Director

Broadly that’s what we got.

The best example of international cooperation at the moment may not be a corruption case (LIBOR) but it marks a clear trend and there are plenty of other less high profile international investigations grinding away where regulators are working together cross border. A source told us that this year the DOJ is to send the SFO a secondee.

More individuals received jail sentences for corruption (for example here), the SFO attacked corporate shareholders with the Mabey civil recovery order and the Self Reporting Guidance was overhauled (OK – scrapped).  The SFO has embarked on a more aggressive intelligence led investigatory and role and no-one would argue that the new SFO Director is pursuing a more aggressive line.

Scotland

In other news the Scottish Crown Office entered into its first civil recovery order under the Self Reporting Guidance it published in July 2011.

The commercial world

In the business world we’ve seen increasing awareness of bribery – it is now common place for questions to be asked and protective steps to be taken in the context of anti-bribery compliance on corporate transactions from day to day appointment of distributors and service providers through to M&A.

A contact in the corporate hospitality industry told us last week that the corporate hospitality industry was down 30% on their statistics.

The reason given for not buying it – the Bribery Act.

This no doubt masks a deeper underlying economic malaise in austere times – but we are aware of examples where corporate hospitality has been rejected.  The reason given? The Bribery Act.

Compliance programs have whirred into action often revealing information which would otherwise have remained unknown with various knock on consequences.

While many corporates are striving to comply we detect a worrying trend of complacency among some which is backed by statistics – the statistic that quarter of Board Directors surveyed would pay a bribe is shocking.

If these people are working for your business they are a liability of the very worst kind.

As the year drew to a close, it ended with the traditional bang with the news from the iconic company Rolls Royce (the aerospace engine manufacturer not the luxury car outfit) that it was in dialogue with the SFO on bribery investigations, the charging of four individuals in (another) Nigerian alleged bribery scheme and of course the first LIBOR arrests.

TIP

Headlines suggesting the Bribery Act is a damp squib and the SFO poorly funded mask the truth.  The impact of the Bribery Act continues to snow ball from both a commercial and enforcement perspective.  The SFO, under new management, is busy.

In practical terms corporate Boards should be asking themselves what comfort do we have that our company is compliant.

Put another way Directors need to know what  steps the business is taking to comply, do they work and are they enough.

We are increasingly asked to audit clients’ ‘Adequate Procedures’ and help fix shortcomings.

For those who remain complacent. 2013 is likely to be unlucky for some.

 

 

 

 

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[…] Volkov makes predictions for 2013. The FCPAmericas blog provides tips on tips. Thebriberyact.com reviews […]

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