Adequate Procedures, Extractive (incl. oil & gas), Facilitation payments, Medical (incl. medical device & pharma), MENA (Middle East & North Africa) - Written by on Saturday, June 11, 2011 12:57 - 0 Comments

June Newsletter: Bribery Act countdown, free e-learning & a facilitation payment solution

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Bribery Act countdown, free e-learning & a facilitation payment solution

Are you ready & 3 months free e–learning!

Is your business still preparing for the July 1st implementation date?  Have you trained your employees?

Some businesses will be ready others will not.  Don’t worry if your business will not be able to complete all its preparations by July 1st. Even if a business is ready, policies and procedures will need to be refined and updated as lessons are learned.


Businesses should make their best efforts in good faith to be ready as soon as they can. However, businesses should not cut corners in an effort to hit the July 1st deadline.  The SFO will be looking for good faith efforts to comply and not just a check the box approach.

We are offering corporate subscribers the opportunity to Beta test our Bribery e-learning compliance package on free in its standard format for three months (usual basic price £1500 per quarter) – conditions apply!   In return all we ask in return is that you feedback any comments or suggestions for improvements.  Contact us for further details.

Facilitation Payments – A solution

Broadly these are small amounts paid to a public official (or other person) as a way of ensuring that they perform their duty, either more promptly or at all.  These are illegal today and remain so after July 1st.

How do you deal with these outlawed payments against a reality that in many countries they are simply a way of life.


For this reason we have been pressing the SFO for clarification of its enforcement approach.  In a further clarification they have informed us that when considering the activities of a company continuing to make small facilitation payments after 1 July 2011, they will look at six areas. They are:

  1. whether the company has a clear issued policy regarding such payments,
  2. whether written guidance is available to relevant employees as to the procedure they should follow when asked to make such payments,
  3. whether such procedures are being followed by employees,
  4. if there is evidence that all such payments are being recorded by the company,
  5. if there is evidence that proper action (collective or otherwise) is being taken to inform the appropriate authorities in the countries concerned that such payments are being demanded,
  6. whether the company is taking what practical steps it can to curtail the making of such payments.

The six areas listed form a six-point plan which if executed correctly will satisfy the SFO that they should not prosecute if such payments are paid post July 1st.  If a business is in the position of receiving facilitation payment demands after July 1st then they must address each of these areas.  Please contact us if you would like to know more about this and help in dealing with the six areas identified by the SFO.

Plans to break up SFO scrapped

“Don’t believe everything you read in the newspapers” was the Home Secretary, Theresa May’s response to the Times story (we reported on here) that the SFO is under a 12 month review following a question from Catherine McKinnell MP (Shadow Solicitor General).
The Home Secretary went on to say that “…there is no suggestion that the SFO has been put under 12 months notice…the SFO is continuing to operate and exist as it has done…”


While the SFO has won this battle it will be keen to demonstrate that it is an effective regulator to cement its position. We anticipate that the SFO will seek to use its new powers under the Bribery Act.  Businesses should not underestimate the SFO nor the likelihood of enforcement action.

The Global picture

The White House announced a new US Middle East Policy in which anti-corruption will be a central theme.

The Director of the Serious Fraud Office, Richard Alderman predicts an increase in workload for the SFO through information which will emerge from the Middle East and North Africa.  He has told us that the SFO is already involved in an Egyptian investigation.  It has also emerged that the U.S. SEC is examining whether Goldman Sachs might have violated bribery laws in dealings with Libya’s sovereign-wealth fund.


If a business is involved in these markets then additional due diligence is advisable.

More Internal investigations

One of the intended consequences of the Bribery Act is that businesses are likely to become aware of potential bribery issues within their businesses.  What should a business do if it receives information about possible bribery or fraud?


We have begun a series of posts on which deal with considering whether an internal investigation is appropriate and if it is, the practical steps which you can take when undertaking one.  A must read for in-house counsel and compliance officers.

The SFO Self Reporting Regime

If an internal investigation reveals a suspicion of a corruptly obtained contract businesses will need to consider carefully what to do.
Senior officers should keep in mind that to do nothing is a risky strategy which will likely be an offence under the UK’s Proceeds of Crime Act potentially creating a risk of lengthy sentences, unlimited fines and confiscation of assets.  There is a potential defence under the Proceeds of Crime Act, namely reporting the suspicion to the Police.

Under a parallel regime the SFO has published guidance around the self-reporting of corruption.  The benefits of using the regime are threefold.

1. Senior officers who are not implicated in the wrongdoing escape liability.
2. A greater degree of control may be retained by the corporate in relation to the investigation.
3. The business may be able to negotiate and agree a civil settlement with the SFO, avoiding criminal prosecution or even escape sanction.


If a business has just uncovered a problem as a result of undertaking a risk assessment now the SFO’s self-reporting procedure should be considered with your legal advisers.

From a practical standpoint there is a window of opportunity now to deal with these issues with the SFO in good faith, which will not stay open forever.

The SFO is keen to demonstrate results in its approach to Bribery Act enforcement, but is unlikely to want to discourage self-reporting.  We believe that in appropriate cases there is an opportunity for ethical companies, keen to implement Adequate Procedures to Prevent Bribery going forward, to obtain a better outcome now than may be the case later.


We are running Bribery Act Masterclasses with in-house counsel of a large Pharmaceutical and an Oil Major later this month.  They will share their experiences of dealing with the challenges they faced with an ethical anti-bribery stance in those industries.

There are still a few places left.  If you would like to attend then please contact us.  We will be running masterclasses in other sectors and other events in the Autumn, stay tuned for details.

And, finally…would you like to win an iPod?

If so then take our short survey here.  We’ll draw names from a hat and declare the winner at the end of the month and post them on the website.  Have a great summer.   Our next newsletter will be in September, in the meantime keep an eye on for updates!

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