Anti-Corruption The UK Approachigc-panama.org/wp-content/uploads/2019/10/Ley-Anticorru...© 2019 Greenberg Traurig, LLP • Background to the Bribery Act 2010 • The Bribery Act 2010

Anti-Corruption – The UK Approach

Legislation, Enforcement and what is on the UK horizon…

OCTOBER 2019 www.gtlaw.com

© 2019 Greenberg Traurig, LLP

• Background to the Bribery Act 2010

• The Bribery Act 2010 – Key Aims

• The Offences – Section 1, 2, 6 and 7

• Focus – Failure to Prevent under Section 7 – The Game Changer

• Focus – Failure to Prevent under Section 7 – The Defence

• UK Prosecutions and Deferred Prosecutions

• The Serious Fraud Office – attitudes to Corporate Criminal Liability and Extraterritoriality

• What is on the UK horizon?

Roadmap

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The Bribery Act 2010

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• Public Bodies Corrupt Practices Act 1889, thePrevention of Corruption Act 1906

• Public Bodies Corrupt Practices Act 1889 –including the offences of soliciting, receiving oragreeing to receive (s1(1)) and giving or promisingto give (s1(2)), where public body concerned.

• Prevention of Corruption Act 1906 – concernstransaction with agents involved.

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Background to the Bribery Act 2010


• To provide for a new consolidated scheme of bribery offences to cover bribery in the UK and abroad

• To replace the existing law

• To simplify offences previously based on the agent/principal relationships to a scheme based onintention

• To provide for extra-territorial jurisdiction

• To address corporate criminal liability

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The Bribery Act 2010 – Key Aims


• Section 1 – Bribing

another person

• Section 2 – Being bribed

• Section 6 – Bribery of

foreign public officials

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Offences


• A relevant commercial organisation (“C”) is guilty of an offence under this section if:

• A person (“A) associated with C

• Bribes another person

• Intending to obtain or retain business for C, OR

• To obtain or retain an advantage in the conduct of business for C

• The second element will be met if A is or would be guilty of an offence under section 1 to 6

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Offences - Failure of commercial organisations to prevent bribery (section 7) – The Game Changer

© 2019 Greenberg Traurig, LLP 8

Offences - Failure of commercial organisations to prevent bribery (section 7) – The Defence

• Section 7(2) it is a defence for C to prove that C had in place ‘adequateprocedures’ designed to prevent persons associated with C from undertakingsuch conduct.

• Guidance – The Six Principles

‘The Government considers that procedures put in place by commercialorganisations wishing to prevent bribery being committed on their behalf should beinformed by six principles.’

1. Proportionate procedures

2. Top-level commitment

3. Risk assessment

4. Due diligence

5. Communication (including training)

6. Monitoring and review


• Proportionality – guidance acknowledges that what constitutes ‘proportionate procedures’ will depend on thenature, scale and complexity of the business carried out by the Company. They should be ‘clear, practical,accessible, effectively implemented and enforced.’

• Top level commitment – ‘Top-level management foster a culture within the organisation in which bribery isnever acceptable.’

• Risk Assessment – highlights a need to ‘assess the nature and extent of exposure’ which for many will‘manifest itself as part of a more general risk assessment’.

• Due diligence – a ‘firmly established element of good governance’ which ‘which often form part of a widerframework’

• Communication – ‘internal and external communication, including training that is proportionate’

• Monitoring and review – ‘Commercial organisations will therefore wish to consider how to monitor and evaluatethe effectiveness of their bribery prevention procedures and adapt them where necessary.’

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Offences - Failure of commercial organisations to prevent bribery (section 7) – The Defence – Adequate Procedures?


Unaoil

Four individuals charged in connection with contracts in Iraq awarded to Unaoil client SBM

Offshore. One guilty plea and three others scheduled to stand trial in January 2020 at

Southwark Crown Court (UK arrest warrants against the company, chairman, CEO and

COO have reportedly been withdrawn).

Sustainable Growth Group (SGG)

Following an SFO investigation and prosecution of SGG and its subsidiaries, three men

were sentenced to between 6 and 13 years imprisonment after being found guilty of a

number of offences including Bribery Act offences.

FH Bertling (pre-bribery act conduct)

A total of 9 executives will be sentenced on 11 December 2018 for involvement in bribery

and corruption schemes related to North Sea oil exploration and the Angolan state oil

company Sonangol.

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Prosecutions and Punishments (UK)


Section 7 Prosecutions (UK) – Few and Far Between

Skansen Interiors Limited (SIL)

• Prosecuted by the Crown Prosecution Service (CPS) and convicted after trial in February 2018, SIL was sentenced to an absolute discharge (no punishment other than the record of conviction) as the Company had been dormant since 2014 and had no assets.

• This is the first successful contested prosecution for a Section 7 offence and actually followed a self-report by SIL following the bribe in question which took place in 2013

Sweett Group PLC (Sweett)

• The first ever sentence resulting from a section 7 conviction.

• Pleaded guilty in December 2015 and was fined £1.4m, ordered to pay costs of £95,031.97. £851,152.23 was also confiscated from Sweett.


• Introduced in the UK in February 2014.

• Joint code of practice produced between the CPS and the SFO -https://www.cps.gov.uk/sites/default/files/documents/publications/dpa_cop.pdf

• The following DPAs result from allegations of Section 7 offences:

• Standard Bank – The indictment was suspended on 30 November 2015 and Standard Bank were ordered topay a US$16.8m financial penalty, US$6,000,000 compensation (plus interest of US$1,046,196.58)disgorgement of profits of US$8,400,000 and the SFO’s costs of £330,000.

• Rolls Royce – Approved by judgment of Sir Brian Leveson on 17 January 2017, the agreement involves apenalty of £239,082,645 and disgorgement of profits of £258,170,000 plus costs of around £13m. The DPAfollowed a lengthy investigation in the activities of RR over a number of decades in multiple jurisdictions.

• Sarclad Ltd – Approved in July 2016, the agreement includes financial orders of £6,553,085.00 including afinancial penalty of £352,000.

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Deferred Prosecution Agreements (DPAs)

https://www.cps.gov.uk/sites/default/files/documents/publications/dpa_cop.pdf


• The ‘Identification Principle’ – liability of officers who are the‘directing mind and will of the corporation’

• A more specific approach required?

• ‘Strict liability’ in the section 7 offence and the offence of failure toprevent tax evasion under the Criminal Finances Act 2017

• ‘If I couldn’t get vicarious liability I would be happy having a failure toprevent offence that I could use across the whole arena of economiccrime’ – Lisa Osofsky, Director of the SFO giving evidence to theHouse of Lords Bribery Act 2010 Committee (November 2018)

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UK Attitudes – Corporate Criminal Liability


• Firmly rooted in the Bribery Act 2010, Section 7

• Other issues of extraterritoriality?

• Investigations - R (on the Application of KBR, Inc.) -v- The Director of theSerious Fraud Office [2018] EWHC 2368 (Admin)

• ‘It is scarcely credible that a UK company could resist an otherwise lawfuls.2(3) notice on the ground that the documents in question were held on aserver out of the jurisdiction’ – Lord Justice Gross at paragraph 64. – watchthis space…

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The SFO – Attitudes – Extraterritoriality


What next for the UK?

• Immunity from prosecution for cooperating witnesses?

• Domestic and International Partnerships?

• What about corporate co-operation?

• New guidance, issued August 2019:

• Enabling the SFO to ‘more quickly and reliably…understand the facts, obtain admissible evidence and progress aninvestigation to the stage where the prosecutor can apply the law to the facts’

• ‘Providing assistance to the SFO that goes above and beyond what the law requires’

• ‘Inconsistent with protecting specific individuals or unjustifiably blaming others; putting subjects on notice andcreating a danger of tampering with evidence or testimony; silence about selected issues and tactical delay orinformation overloads’

• ‘It is important that organisations seeking to co-operate understand that co-operation – even full, robust co-operation – does not guarantee any particular outcome.’



House of Lords Committee on the Bribery Act 2010 – Post Legislative Scrutiny – What the Companies said…

• Mark Gregory, General Counsel, Rolls-Royce plc: “We would consider the Bribery Act to be the high-water mark.”

• Joanna Talbot, Chief Counsel, Compliance & Regulation, BAE Systems Plc : “We take any number ofsoundings on the countries that we want to export to. We will talk to the British Government and the localembassies and work closely with them to understand the country…The Act enables us to export tocountries to which we might not otherwise choose to do so.”

• Interchange Solutions Limited [written evidence, on SMEs] - “companies that have a properlyembedded anti-bribery compliance programme within the business … not… face any negative impacts”,but “through a robust business risk assessment process, they are better able to identify opportunities,build stronger local partner relationships thereby obtaining competitive advantage, yet knowing how toavoid bribery.”

• Chris Blythe, OBE, CEO, Chartered Institute of Building: “The guidance is adequate. The problem ispeople’s ability to understand it. You have to remember that, in the construction industry, 90% of peopleare employed in firms that employ 10 or fewer people. It is very fragmented, so people come in and out ofthe construction industry. It is a bit like the tide; there is ebb and flow, and on some days you could beworking in one industry and on other days in another.”


• The House of Lords said:

• Investigations take too long…

• Police forces need more training…

• Guidance on ‘adequate procedures’ shouldbe expanded…

• Extending Corporate Criminality – the Govt.should ‘delay no more’…

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• The Government said:

• ‘Aware of the need to progress cases withoutdelay…speeding up investigations is a keypriority’

• ‘Recognises there is a need to improveawareness of the Bribery Act offences’ amongpolice forces but ‘not enough evidence toexpand’ training programs

• ‘…does not agree [that the guidance should berevised]…[the Guidance] is deliberately notprescriptive and is not a one-size-fits-alldocument’.

• ‘The Government agrees that the response to theCall for Evidence on Corporate Criminal Liabilityshould issue soon.’

House of Lords Committee on the Bribery Act 2010 – Post Legislative Scrutiny


What can/should companies do?

• Third Party Due Diligence

• Policies and procedures implemented and endorsed by those at the top

• Risk Assessments

• Identifying, reporting and investigating any issues

• Training




Takeaways


Barry VitouShareholder and Global Practice [email protected]+44 (0) 203 349 8700

Barry Vitou is Co-Chair of the Global White-Collar Criminal Defense Practice

and head of London’s White Collar Defense & Special Investigations

Practice, advising corporations and individuals in connection with

compliance, pre-investigations, investigations, and prosecutions conducted

by numerous law enforcement agencies. Barry frequently represents clients

under investigation by U.K. and U.S. law enforcement agencies and

prosecutors, including the U.K.’s Serious Fraud Office (SFO), the Financial

Conduct Authority, the Information Commissioner’s Office, the U.S.

Department of Justice (DOJ), and the U.S. Securities and Exchange

Commission (SEC). Barry regularly appears on television and radio,

discussing the topics of corruption, money laundering, and the UK Bribery

Act.

mailto:[email protected]

Documents

Anti-Corruption The UK Approachigc-panama.org/wp-content/uploads/2019/10/Ley-Anticorru...© 2019 Greenberg Traurig, LLP • Background to the Bribery Act 2010 • The Bribery Act 2010