This document summarizes information from a briefing on the UK Bribery Act by Rachna Gokani. It discusses the roles of the Serious Fraud Office and Financial Services Authority in investigating corruption. It also summarizes the Director of the SFO's statements on ramping up intelligence efforts and taking a tougher approach in investigating companies, including withdrawing guarantees of non-prosecution for self-reporting.

1. CBI Bribery Act Briefing
Rachna Gokani
QEB Hollis Whiteman

2. Serious Fraud Office/Financial Services Authority
 Serious Fraud Office: the lead agency in England, Wales and
Northern Ireland for investigating and prosecuting cases of
domestic and overseas corruption.
 Financial Services Authority: making strident attempts to
combat corrupt activity within the financial sector.
 Agency cooperation: an example is the LIBOR investigation in
which the SFO have taken on board a huge amount of FSA
data

3. The Serious Fraud Office (SFO): Shift in approach?
"I would like the SFO to have a hard-edged, tough reputation. It
should be something which is feared. You don't want to be
investigated by the SFO... I am really going to ramp up our
intelligence ability. There is a vast amount of information
available in open-source material. It is all over the place. It
needs to be collated and worked up, and then blended with
more sophisticated intelligence. This will then be blended with
more exotic intelligence which we can get from an outside
source like the City of London Police, right the way up to using
covert human intelligence sources if appropriate and any more
exotic intelligence.”
- David Green CB QC
Director of the SFO

4. Myths
Myth 1: That the SFO will never find out.
 The response from the SFO: think again.
 We are expanding our intelligence capacity. We will obtain
information from whistle-blowers, foreign jurisdictions, the
Security Services, other prosecuting agencies. We are also
looking to carry out live investigations by using all means
available including covert surveillance

5. Myths (2)
Myth 2: That the SFO cannot afford to prosecute
 Ministers have agreed that the SFO will not be prevented
from prosecuting due to lack of resources.
 The SFO has obtained ministerial agreement for additional
funding in the 'blockbuster' cases
 Example of ‘blockbuster funding’ is LIBOR: the Treasury has
underwritten the SFO up to £3.5 million in order to cover
LIBOR.

6. Myths (3)
Myth 3: That the SFO don't have the stomach for a fight.
 Message from the SFO: “We do.” The SFO is here to fight
crime - serious fraud.
 Recalibration of the mission and approach of the SFO.
 Complete structural reorganisation of the office, building in
layers of quality control.

7. SFO revised policies
 On 9th October 2012, the SFO published less compromising
revised policies on:
(a) corporate self-reporting;
(b) facilitation payments; and
(c) business expenditure
 Took immediate effect and superseded all previous statements
of policy.
 The earlier guidance put an unnecessary gloss on
test to be applied

8. Why were revisions published?
 To restate the SFO's primary role as an investigator and
prosecutor of serious and/or complex fraud, including
corruption;
 To ensure there is consistency with the approach of other
prosecuting bodies; and
 To take forward certain OECD recommendations.
 The SFO's primary role is to investigate and prosecute. The
revised policies make it clear that there will be no
presumption in favour of civil settlements in any
circumstances.

9. Self-reporting
 If on the evidence there is a realistic prospect of conviction,
the SFO will prosecute if it is in the public interest to do so.
 The fact that a corporate body has reported itself will be a
relevant consideration to the extent set out in the Guidance
on Corporate Prosecutions.
 Must form part of a "genuinely proactive approach adopted
by the corporate management team when the offending is
brought to their notice".

10. Self-reporting (2)
 Self-reporting is no guarantee that a prosecution will not
follow. Each case will turn on its own facts.
 In appropriate cases the SFO may use its powers under
proceeds of crime legislation as an alternative (or in addition)
to prosecution
 In cases where the SFO does not prosecute a self-reporting
corporate body, the SFO reserves the right (i) to prosecute it
for any unreported violations of the law; and (ii) lawfully to
provide information on the reported violation to other bodies
(such as foreign police forces).

11. Self-reporting (3)
“What I have done most specifically, which certainly excited some -
perhaps they are easily excited- is to withdraw the exclusive pledge
that the SFO would not prosecute if you self-report. Why did I do that?
In my view, it is not something that a responsible prosecutor should be
saying, simply because you have no idea what kind of facts or
combination of facts you might be presented with when somebody
comes through your door with an expensive lawyer. You have no idea,
so you cannot cater for it in advance. What you can say, without
question, is that the fact of a genuine self-report- by a genuine self-
report I mean, in its purest form, telling us something that we did not
know already, and the corporate acting proactively to investigate it-
must be very significant as a factor in weighing up the public interest
limb of the decision to prosecute; that is the code test.”
-David Green CB QC
Director of the SFO

12. Facilitation Payments
 A facilitation payment is a type of bribe and should be seen as
such.
 Facilitation payments were illegal before the Bribery Act came
into force and they are illegal under the Bribery Act, regardless
of their size or frequency.
 If on the evidence there is a realistic prospect of conviction, the
SFO will prosecute if it is in the public interest to do so.

13. Corporate Hospitality
 Bona fide hospitality or promotional or other legitimate
business expenditure is recognised as an established and
important part of doing business.
 It is also the case, however, that bribes are sometimes
disguised as legitimate business expenditure.
 If on the evidence there is a realistic prospect of conviction,
the SFO will prosecute if it is in the public interest to do so.

14. Corporate Hospitality (2)
 The SFO will prosecute offenders who disguise bribes as business
expenditure, but only if (a) the case is a serious or complex one
that falls within the SFO's remit and (b) the SFO concludes, applying
the Full Code Test, that there is an alleged offender that should be
prosecuted.
 "I am sceptical of guidance notes. I suspect the motives of those
that want absolutely precise guidance, because I suspect they want
to wait round the corner and hit you over the head with it, and say,
you are acting contrary to your guidance. The criminal law covers an
endless multitude of possibilities and possible sets of facts. It is very
hard to be specific. On corporate hospitality, it rather depends on
the motive and the context and the timing and the value. You can't
just say, Wimbledon tickets are OK. They'll say that you said,
'Wimbledon tickets are all right.'"

15. Corporate Hospitality: Ministry of Justice Guidance
 Conduct a bribery risk assessment relating to your dealings with
business partners and foreign public officials and in particular the
provision of hospitality and promotional expenditure.
 Publish a policy statement committing to transparent,
proportionate, reasonable and bona fide hospitality and
promotional expenditure.
 Issue internal guidance on procedures that apply to the provision of
hospitality and/or promotional expenditure

16. Corporate Hospitality: Ministry of Justice Guidance
(2)
 Regularly monitor, review and evaluate the internal
procedures and the company’s compliance with them.
 Provide appropriate training and supervision to staff.
 The recipient should not be given the impression that they are
under an obligation to confer any business advantage or that
the recipient’s independence will be affected

17. Corporate Hospitality: Transparency International
Guidance
 Have written policies covering gifts, hospitality and expenses;
 Those policies must prohibit the offer or receipt of gifts, hospitality or
expenses whenever these could affect or be perceived to affect the
outcome of business transactions and are not reasonable and bona fide
expenditures
 Have in place procedures and controls, including thresholds and reporting
procedures, to ensure that the company’s policies relating to gifts,
hospitality and expenses are followed
 Ensure there are clear guidelines to enable employees to know how to
handle the giving or receiving of gifts, hospitality and expenses

18. Corporate Hospitality: Transparency International
Guidance
 Ensure there is a procedure to communicate to employees the guidelines
for gifts, hospitality and expenses
 Give tailored training to employees on the rules for gifts, hospitality and
expenses
 Ensure there is a procedure for communicating to business partners the
guidelines for gifts, hospitality and expenses
 Gifts, hospitality and expenses given are to be recorded accurately in the
books
 Ensure that gifts, hospitality and expenses given or received are
documented and reviewed by management to ensure compliance with the
policies

19. First Bribery Act prosecution: R v Patel
 A former magistrates' court administrative officer admitted
taking a £500 bribe to "get rid" of a speeding charge.
 In order to induce or persuade some defendants to give him
bribes, he informed them that if they came before the
magistrates there would be prejudice against them on racist
grounds
 Described as: “a systematic and prolonged breach of trust”

20. R v Patel: Sentence
 A man of good character
 Sentenced to 6 years’ imprisonment by the Recorder of
Westminster, HHJ McCreath
 Reduced to 4 years’ imprisonment on appeal

21. Publicised investigations
 17 December 2012: Four charged in Nigerian Corruption
Investigation;
 11 December 2012: Three arrested in LIBOR investigation
 Request for information about potential bribery from Rolls-
Royce

22. Deferred Prosecution Agreements (DPAs)
 Voluntary agreement between a prosecutor and an
organisation that, in return for compliance with certain
requirements, the prosecutor will defer and ultimately
discontinue criminal prosecution of the organisation.
 Not available to individuals.
 Available for a wide range of financial crime, money
laundering and corruption offences.
 Royal Assent is expected in spring 2013.

23. Debarment
 Debarment is the exclusion of an entity from public contracts
whether as supplier, contractor or service provider.
 Mandatory debarment: Section 1 or 6 Bribery Act 2010 offence
 Discretionary debarment: Section 2 or 7 Bribery Act 2010 offence
 Self-reporting and debarment
 Debarment from World Bank or multilateral development bank
funding and difficulties in obtaining Export Credit Agency funding

24. Discovering Bribery: Guiding principles
 Identify who is in charge of leading the internal
investigation – consider whether it should be conducted by
an individual who is independent of the company;
 Compile a team to conduct the investigation – this must
include lawyers and will usually include accountants. Those
individuals will need to consider guidance issued by the
relevant authorities on the conduct of such investigations;
 Preserve the evidence – this will include both hard copy
and electronic copy documents;

25. Discovering Bribery: Guiding principles (2)
 Swiftly obtain independent legal advice on:
a. what the real issues are;
b. self-reporting;
c. the internal investigation process;
d. whether separate representation should be arranged for
directors/staff;
e. Legal Professional Privilege;
f. who speaks for the company.

26. Discovering Bribery: Guiding principles (3)
 Consider what you are permitted to do by the Data
Protection Act and the Regulation of Investigatory Powers Act;
 Ensure that retaliatory action is not taken against any
whistleblower;
 Consider whether to self-report and when to do it;
 Ensure that there is an external review of the company’s
policies and procedures;
 Take remedial action

27. CBI Bribery Act Briefing
Rachna Gokani
QEB Hollis Whiteman
www.qebholliswhiteman.co.uk
rachna.gokani@qebhw.co.uk