1. SHINE webinar
Focusing on deferred prosecution agreements
and bribery and corruption
Polly Sprenger – Of Counsel, Fraud & Investigations

2. What’s covered…
• UK Bribery Act and the UK Serious Fraud Office
• Deferred Prosecution Agreements
• The US – threat and enforcement
• Worldwide
• Any questions

3. UK Bribery Act (“UKBA”)
No prosecutions of companies to date but:
• Currently around 15 ongoing investigations by the SFO
(re UKBA and pre Bribery Act legislation) against companies
• SFO working with FCA, US DOJ and US SEC as well as other
agencies to share intelligence and investigate
• SFO brought charges against 4 individuals (including 3 directors)
at Sustainable AgroEnergy under UKBA in August 2013
• SFO been given special “blockbuster” funding on 20 January 2014
to pursue bribery case
• Deferred prosecutions agreements – now in effect as of
24 February 2014

4. SFO – change in focus but resourcing issues
• In October 2012, the SFO re-stated its primary role following
the appointment of David Green QC as Director of the SFO:
– “as an investigator and prosecutor of serious or
complex fraud”
– “The SFO encourages corporate self-reporting, and will always
listen to what a corporate body has to say about its past
conduct; but the SFO offers no guarantee that a
prosecution will not follow any such report.”
SFO, Questions and Answers on Revised Policies,
9 October 2012
Impact of the SFO’s re-stated focus?

5. First SFO charges under the UKBA
Sustainable AgroEnergy
• August 2013 – SFO charged three former directors and an
affiliated financial adviser
• Alleged ponzi scheme in which defendants allegedly tricked UK
investors into purchasing shares in biofuel-related investments
in Cambodia
• All four defendants faced charges of conspiracy to commit fraud
and conspiracy to furnish false information to investors
• Three defendants also faced charges of “making and accepting a
financial advantage” under the UKBA
• Cambodian government is also pursuing a number of criminal
charges based on the same transactions

6. First SFO convictions under the UKBA
Sustainable AgroEnergy
• 5 December 2014 – first two individuals convicted under the UKBA
since it took effect in 2011
• Gary West, former Director and Chief Commercial Officer,
convicted of accepting bribes in violation of s2(1) and 2(2) of the
UKBA and sentenced to a total of 13 years imprisonment
• Stuart Stone, director of an agency selling unregulated pension
and investment products, convicted of offering bribes in violation
of s1(1) and 1(2) of the UKBA and sentenced to six years
imprisonment

7. First SFO conviction of company for
foreign official bribes
Smith & Ouzman
• December 2014 – printing company found guilty of making
£400,000 of corrupt payments to obtain contracts in Africa
• Christopher Smith and Nicholas Smith were convicted of two and
three counts of agreeing to corrupt payments respectively
• The individuals and the company will be sentenced in February
2015

8. Blockbuster funding
Is the SFO under resourced?
• UK Treasury gave extra funding to SFO to pursue
investigations into alleged LIBOR rigging
• Such funding has been granted on more than one
investigation – the SFO has secured extra funding for its
investigations into allegations of bribery by Rolls Royce in
Indonesia and China
• US DOJ also involved and sending requests for information

9. Deferred prosecution agreements
are now law in the UK
The basics
• A written agreement between the prosecutor and the
defendant company
• Prosecution is deferred, and eventually dismissed, if the
company complies with set conditions
• Conditions are likely to include:
– Financial penalty
– Reparation to victims
– Repayment of profits from unlawful conduct;
– Appointment of an independent monitor (in more serious cases)
– Measures to prevent future offending.
• Used in the US for many years

10. Corporate criminality
The background to DPAs
• Corporate criminal liability models
– US: Respondent Superior
– UK: Controlling mind (“identity principle”)
– Proposed “failure to prevent” offences
• Costs and risks of corporate prosecutions
• Criteria in favour of DPA vs. prosecution
• Collateral consequences: the “Arthur Andersen principle”

11. UK DPA procedure
Preliminary approach and negotiations
• Initial investigations and self-reporting
• Recording obligations of the prosecutor
• Voluntary nature of invitation to negotiate
• Considerations of the prosecutor prior to invitation
to negotiate
– Criteria for determining the public interest
• Procedural requirements of the formal letter of invitation
• Acceptance of the invitation and further undertakings
Initial hearing
Final hearing
Compliance: the real challenge

12. Guidance
• The UK DPA Code
• Sentencing Guidelines
• The Code for Crown Prosecutors
• Bribery Act Guidance
• Joint Guidance on Corporate Prosecutions
• Criminal Procedure Rules Part 12
• US Attorney's Manual: Principles of Corporate Prosecutions
• Deferred Prosecution Agreements: the law and practice of
negotiated corporate criminal penalties

13. Deferred Prosecution Agreements: the law and practice of
negotiated corporate criminal penalties

14. Amenable offences
Relevance of the Sentencing Guidelines
• Formula for establishing level of financial penalty
Offences: only corporate defendants
• Fraud and theft offences
• Money laundering offences
• Bribery and corruption offences
• Forgery and counterfeiting offences
• Direct and Indirect tax offences
• Companies Act offences
• Financial Services and Markets Act 2000
Ancillary offences
• Aid, abet, counsel or procure
– Encouraging or assisting an offence under Serious Crime
– Act 2007
– Attempt and conspiracy

15. Practical processes and decision-making
The first alert and internal investigations
• Whistle-blowing programmes
• Conduct of internal investigation
– Investigation team and reporting
– Recording, methodology, interviewing
• Consideration of privilege
Self-reporting
• Implications of making a self-report
– Putting the prosecutor on-notice
– No guarantees of negotiated settlement
– Possibility of lenience
Statement of Facts
• Non-contradiction clauses
• Public document
• Use in further proceedings

16. Global settlements
Cross-border agreements
• Challenges of negotiating a global settlement
• When “global” means “domestic”
• Global settlements in the UK
– R v Innospec
– R v BAE
• United States v Siemens

17. UK enforcement: the companies (under pre UKBA laws)
Company Industry Date Penalty
Abbott Group Oil and Gas Nov 2012 £5.6million (civil settlement). First company to
have met strict criteria of self reporting initiative.
Oxford University Press Publishing July 2012 £1.9 million (civil recovery order). Debarment
from World Bank funded tenders for three years.
Mabey & Johnson Ltd Engineering January 2012 £130,000 (shareholder recovery)
Macmillan Publishers Ltd Publishing July 2011 £11 million (civil recovery order). Debarment from
World Bank funded tenders for three years.
Compliance monitor.
De Puy International
Limited
Healthcare April 2011 £4.8 million (civil recovery order)
MW Kellogg Limited Engineering February 2011 £7 million (confiscation of funds received from
unlawful conduct)
BAE Systems Plc Defence/Aerosp
ace
December 2010 £500,000 million (part of £30m global agreement)
Innospec Ltd Energy March 2010 £8 million (part of US$40m global settlement).
3 year US/UK compliance monitor
AMEC plc Engineering October 2009 £5 million (civil recovery order)
Mabey & Johnson Ltd Engineering September 2009 £6.6 million. Compliance monitor

18. UK enforcement: the individuals (under pre UKBA laws and UKBA)
Company Individual Date Offence/Penalty
Smith & Ouzman Christopher and Nicholas
Smith
February
2015
Agreeing to corrupt payments – company and individuals await
sentencing in February 2015
Aluminium Bahrain
BSC (Alba)
Bruce Hall, former CEO July 2014 Sentenced to 16 months for conspiracy to corrupt
Sustainable
AgroEnergy plc
Gary West, James Whale,
Stuart Stone, Fung Wong
August
2013
Charged with conspiracy to commit fraud by false
representation and conspiracy to furnish false information.
West, Stone and Wong were also charged with offences of
making and accepting a financial advantage contrary to s1(1)
and 2(1) of the UKBA 2010
West and Stone were convicted on 5 December 2014 and
sentenced to 9 and 6 years respectively
Smith & Ouzman
Limited
Chris Smith, Nick Smith, Tim
Forrester, Abdirahman Omar
October
2013
Charged with offences of corruptly agreeing to make payments
totalling nearly half a million pounds, contrary to section 1
Prevention of Corruption Act 1906
Innospec Ltd Paul Jennings, former CEO July 2012 Sentenced to two years in prison following pleading guilty to
three charges of conspiracy to commit corruption
Innospec Ltd Mr Miltos Papachristos,
Regional Sales Director for
Asia-Pacific Region & Mr
Dennis Kerrison, former CEO
June 2012 18 months and four years in prison respectively after being
convicted of conspiracy to commit corruption
Innospec Ltd Dr David Turner, former Sales
and Marketing director
January
2012
16 month suspended sentence with 300 hours unpaid work
following pleading guilty to three charges of conspiracy to
commit corruption
Mabey & Johnson
Ltd
Richard Charles Edward
Forsyth, former MD
February
2011
21 months imprisonment, disqualified from acting as a
company director for five years and ordered to pay prosecution
costs of £75,000
Mabey & Johnson
Ltd
David Mabey and Richard
Gledhill, both former sales
director and
February
2011
Mabey: Eight months imprisonment, disqualified from acting as
a company director for two years and ordered to pay
prosecution costs of £125,000. Gledhill: eight months
imprisonment, suspended for two years

19. For further information
• Please contact:
• Polly Sprenger – pollysprenger@eversheds.com
• Neill Blundell - neillblundell@eversheds.com
• To sign up for future webinars and events, please visit:
• http://www.eversheds.com/global/en/what/services/in-
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