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AUG
11

UK Sets Up Specialist Anti-Corruption Unit

briberyThe International Development Secretary announced the formation of a specialist unit, the International Corruption Unit (ICU), to deal with this important area of corporate criminal offending.

The unit will draw on the resources from agencies including the Metropolitan Police, City of London Police, and the National Crime Agency. The ICU will be operated by the NCA and, according to the Government, will be “the central point for investigating international corruption in the UK”. It does not say that the unit will be given any additional funding, and it is not immediately clear where the SFO, who have been investigating and prosecuting bribery and corruption to date, will stand as far as this new unit is concerned.

The UK has a poor record in this field, despite the recent focus by the SFO, and with the prospect of a FATF audit looming in spring 2016 something has to be seen to be done.

What is of immediate interest is that this new unit brings back the ownership of these investigations and prosecutions to the Police and the NCA, reaffirming that these offences are criminal offences and not a ‘spinoff’ from civil litigation, which is how most City law practices view this area when advising their corporate clients. The emphasis on criminal investigations is exactly what David Green QC, head of the SFO, has been saying all along.

The Police will use established investigative methods; City of London Police have had a very effective specialist overseas corruption unit in place for a number of years, and the NCA relies primarily upon intelligence gathering, e.g. probe evidence and tapped phones and computers. This will bring into focus criminal disclosure, privilege, conflict issues, criminal interviews by experienced police officers under caution, search and seizure, etc.

The NCA’s approach is aggressive and they have encountered serious recent criticism from senior judiciary concerning their approach to warrants and disclosure, amongst other issues.

The Government press release states that the Department of International Development has “Since 2006 … investigated more than 150 cases of overseas bribery and recovered £200 million of stolen assets as well as successfully prosecuting 27 individuals and one company.” It is difficult to see how that record can be improved upon without any additional funding.

Contact Lewis Nedas Expert Lawyers

Should you or your company find itself the subject of such a bribery and corruption investigation by the ICU or the NCA, you will need to instruct specialist criminal lawyers with extensive, proven experience of successfully defending these investigations/prosecutions, for the reasons alluded to earlier in this piece. Find out more here or contact our specialist lawyers on 0207 387 2032 or complete our online enquiry form here.

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NOV
17

Fifth Anniversary of Magnitsky Campaign

sergei-magnitskyBill Browder writes in the FCPA blog (16/11/2014) on the fifth anniversary of Sergei Magnitsky’s killing in Russian Police Custody. Click here to read his comments.

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FEB
14

Corruption in the EU – a Commission Report

briberyCorruption continues to pose a significant challenge across Europe, according to a recent report from the European Commission. This found that corruption exists at some level in all Member States and costs the European economy around 120 billion euros per year.

Public Opinion on Corruption

The extent of the problem has not gone unnoticed amongst the general population.

A recent Eurobarometer survey on attitudes to corruption found that 76% of Europeans believe there is widespread corruption, and 56% believe that their country has seen an increase in the problem over the past three years. In addition, 8% of Europeans have apparently personally experienced or witnessed corruption first hand in the last twelve months.

Interestingly, the figures are much lower if you look at the UK in isolation. Only 64% of people in the UK think corruption is widespread, and 16% feel it personally affects them (EU average 26%). The report also found that the UK has the lowest proportion of respondents in the EU who report being asked or expected to pay a bribe in the last year (0%) or who know someone who has accepted a bribe (7%).

From a business point of view, 15% of companies reported finding corruption to be an issue when conducting business in the UK (EU average 43%) and 46% believe corruption is widespread (EU average 75%).

Less of a Problem in the UK, says Report

The Commission’s report includes a chapter dedicated to each EU Member State. In light of the public opinion figures given above, it is perhaps not surprising that with regards to the UK, the report concludes that “petty corruption does not appear to pose a challenge”.

It highlights the progress made in the UK in tackling bribery, particularly when conducting business abroad, and notes that the country continues to expect high ethical standards from those employed in public service.

The report also notes the wide variety of organisations in the UK that have a role in tackling corruption, many of which have overlapping competences - creating the need for close coordination. It gives special mention to the role of the new National Crime Agency, which has a specialist unit designed to deal with economic crimes such as fraud, bribery and corruption and plays an important coordinating role.

Tackling Bribery

According to the report, the UK’s Bribery Act 2010 is one of toughest sets of anti-bribery rules in the world.

It explains that the introduction of the Act followed concerns expressed by the Organisation for Economic Co-operation and Development (OECD) about the absence of any UK foreign bribery prosecutions in the ten years following the ratification of the OECD Anti-Bribery Convention. Once the Act was introduced, 23 foreign bribery cases were heard in the UK courts in one year.

The report also takes a positive view of the fact that the Bribery Act encourages whistleblowing, which is seen as an effective way of helping to prevent bribery.

Areas for Improvement

The Commission’s report contains a number of UK-specific recommendations on how to improve the way in which the country tackles corruption. These include:

  • Putting additional preventive measures in place to tackle the foreign bribery risk, and creating sector-specific guidelines to help companies in sectors at increased risk, such as the defence industry.
  • Tougher measures to increase accountability in bank governance.
  • Imposing caps on donations that can be made to political parties, restricting spending on electoral campaigns and improving the monitoring of potential violations.

"Corruption undermines citizens' confidence in democratic institutions and the rule of law, it hurts the European economy and deprives States from much-needed tax revenue,” commented Cecilia Malmström, EU Commissioner for Home Affairs. “Member States have done a lot in recent years to fight corruption, but today’s Report shows that it is far from enough. The Report suggests what can be done, and I look forward to working with Member States to follow it up."

Contact Lewis Nedas’ Criminal Lawyers in London

If you are facing a bribery or corruption investigation, or need specialist legal advice on bribery and corruption compliance, please contact our solicitors Jeffrey Lewis or Siobhain Egan on 020 7387 2032 or complete our online enquiry form here.

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JUN
17

Total SA’s FCPA Deferred Prosecution Agreement: What Did It Have to do with the USA? – by Siobhain Egan

In short, not a lot!

Why then were the Department of Justice and the Securities and Exchange Commission able to levy some $398 million, the fourth largest fine under the FCPA (Foreign Corrupt Practices Act), the US equivalent to our Bribery Act 2010, and enter into a deferred prosecution agreement with a French oil and gas company in relation to the payment of massive bribes to the Iranians?

It seems that Total SA were involved in paying bribes totalling $60 million to the chairman of an Iranian engineering company between 1995 and 2004, involving two intermediaries. It was alleged that the engineering company was largely owned and controlled by the Iranian government, and it concerned oil/gas drilling rights in the SIRR A and E, South Pars oil and gas fields.

The battle between Total SA and US authorities has been raging since 2010 and the only nexus between the Iranian bribery allegations and the USA was that $500,000 passed through a US bank in 1995. That is the sum total of any monies (0.8% of the bribes) that connected this situation with the Americans.

The French, who do have their own anti-bribery legislation, have decided to recommend that four senior Total SA employees should be prosecuted at some stage, but it isn't suggested anywhere that they stand to gain any of the $398 million fine.

The terms of the DPA itself are interesting not just because they concern such an old allegation, but also that they demand an independent corporate compliance monitor be appointed, and extend international FCPA co-operation to an extent which has not been seen before.

It is also interesting because US legal commentators state that this is the first FCPA DPA that is within the US DPA Sentencing Guidelines, albeit, and surprisingly, at the lower end of the guidelines. It seems that most corporate fines under DPAs to date have been about 25% less than the recommended lower range.

Total did not self-report and did not have any anti-bribery and corruption compliance systems in place at all, so it is interesting that they were able to negotiate a fine towards the lower end of the guidelines in those circumstances.

This also points to a major criticism of the US approach to DPAs; that there just does not seem to be any consistency and transparency of approach, which makes it very difficult for any corporate offender when negotiating with the authorities. This flexibility and lack of a structured approach is useful for the US authorities, and of course the US judiciary currently have no real role to play in these agreements other than rubber stamping them.

This country will take a very different view of DPAs; the Judiciary here are determined to have a structured process with a defined role for the over-seeing Judge to play. The Sentencing Council, when drafting the DPA guidelines, will ensure consistency and transparency of approach. It may be in the end that the US will learn something from this country about the correct approach to DPAs.

However this DPA fine (and the much-rumoured News Corp FCPA settlement, supposedly in the region of $850 million) must be giving the SFO some food for thought?

 

 

 

 

 

 

 

 

 

 

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FEB
18

Slim Pickings for Bribery Enforcement – by Siobhain Egan

The Serious Fraud Office completed only four bribery and corruption cases in the past year (two criminal and two civil settlements), says Ernst & Young’s newly published UK Bribery Digest. The Scottish authorities completed one case.

According to the accountancy firm, no prosecutions have yet been made against businesses under the Bribery Act – despite the law coming into force 18 months ago.

These findings come despite indications from Ernst & Young’s Global Fraud Survey that bribery and corruption has risen over recent years - with 15% of executives saying they would contemplate unscrupulous behaviour including providing personal gifts or cash to secure business.

The survey of over 1,700 CFOs, heads of legal, compliance and internal audit, also showed that the numbers who felt that providing personal gifts to secure business could be justified more than doubled in two years.

“However,” warned Jonathan Middup Ernst & Young partner and UK leader of Anti-Bribery and Corruption services, “the SFO has said it has 11 active bribery and corruption cases and a further 18 under consideration. Given that we are also assisting with a number of issues on behalf of clients we expect that corporate Bribery Act cases will be brought into the public arena this year.”

“Organisations would be unwise to hold back on their compliance programmes just because the courts are currently quiet,” he said.

For specialist legal advice and representation from our solicitors for SFO charges or investigations, bribery and corruption compliance or investigation legal advice, please contact Jeffrey Lewis or Siobhain Egan on 020 7387 2032.

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