International - Written by Barry & Richard on Sunday, April 21, 2013 6:33 - 0 Comments
SFO confirms Civil Recovery Orders still on the cards – clarifies approach & gears up for another inspection
One the of the eight recommendations by HM Crown Prosecution Service Inspectorate of the Serious Fraud Office was that “The SFO needs to design and document a transparent process for deciding to pursue civil recovery, and negotiating/agreeing any consent order.”
On 17 April 2013 (last Wednesday) – the Director of the SFO announced that “the SFO has issued a statement relating to the SFO’s approach to civil recovery” presumably with the intention of addressing this suggested improvement.
“In line with its statutory purpose, the SFO will investigate and, where appropriate, prosecute cases of serious or complex fraud including bribery and corruption. The civil recovery powers available to the Director of the SFO under Part V of the Proceeds of Crime Act 2002 provide an additional means of dealing with certain cases (or parts of cases) where property derived from crime can be identified, whether it is held by an individual or body corporate. In exercising these powers, the Director of the SFO will follow the Attorney General’s published guidance to prosecuting bodies on their asset recovery powers, issued in November 2009 under Section 2A of the Proceeds of Crime Act 2002. The SFO will also place in the public domain sufficient information about its civil recovery cases to demonstrate transparency in its decision making.”
Some doubted whether Civil Recovery would remain on the agenda after the arrival of David Green as the new Director on a more hard line enforcement ticket.
Observers did not have to wait long to see the Civil Recovery Powers in use in the July civil settlement with Oxford University Press.
We reported on OUP here, noting that the details published by the SFO in relation to the Civil Recovery Order marked a departure from prior press releases under the former Director, Richard Alderman. The OUP press release was much more detailed in an attempt to address criticisms made only weeks before in the OECD peer review which said:
The lead examiners consider civil recovery orders to be a useful remedy in foreign bribery enforcement actions, but they caution against its possible overuse. They therefore recommend that the policy of systematically settling self-reported foreign bribery cases “civilly wherever possible” should be reconsidered. They further recommend that the UK ensure that self-reported cases are resolved in a manner consistent with the Convention. When a civil recovery order is used because criminal sanctions are unavailable, the UK should make public the reasons for doing so, where appropriate. After the on-site visit, the SFO undertook to review its policy on self-reporting.”
The restatement of the principles published in the Attorney General’s guidelines published in 2009 could be overlooked as non news.
However, two prior reviews since the publication of that guidance, namely the OECD and the HM Inspectors reports, demanded that changes be made or clear guidelines given in the context of Civil Recovery Orders.
Civil Recovery Orders maintain their place in the SFO’s enforcement armoury, even in a world where there are Deferred Prosecution Agreements. Which road is chosen will depend on a combination of factors, not least the evidence and the outcome of the weighing of the various factors in deciding whether to prosecute.
As David Green recently said: “We investigate and prosecute: civil settlement is still alive and well, in the right circumstances but we are not there to offer deals and a special easy path for white collar criminals.”
Against a backdrop where the Attorney General recently revealed that the SFO will be reinspected within the next 12 months the statement issued by the Director last week should be seen as completing the improvements suggested by the OECD and the Inspector’s report and gearing up for the next inspection.