Yawning At The SFO’s “Revised Policies”
Yesterday, the U.K. Serious Fraud Office (“SFO”) issued a release (here) announcing that it “has reviewed its policies on facilitation payments, business expenditure (hospitality) and corporate self-reporting.” According to the SFO, the purpose of the “revised policies” is to
- restate the SFO’s primary role as an investigator and prosecutor of serious or complex fraud, including corruption;
- ensure there is consistency with other prosecuting bodies; and
- meet certain OECD recommendations.
For the most part, although much ink is likely to be spilled by FCPA Inc. / Bribery Act Inc. in the coming days, the SFO’s “revised policies” are a yawner.
As to facilitation payments (here) and business expenditures (here), the SFO notes as follows. Whether or not the SFO will prosecute in respect of a facilitation payment or payments or in respect of a bribe presented as hospitality or some other business expenditure will be governed by the Full Code Test in the Code for Crown Prosecutors and the Joint Prosecution Guidance of the Director of the SFO and the Director of Public Prosecutions on the Bribery Act 2010.
The Full Code Test (see here at Section 4) is essentially a realistic prospect of conviction plus in the public interest standard for bringing prosecutions.
As to facilitation payments, the SFO stated that “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.”
Treatment of facilitation payments under the Bribery Act has been analyzed to death since enactment of the Bribery Act, however I have yet to see any reference to a pre-Bribery Act prosecution even though such payments were illegal prior to the Bribery Act. That would seem to answer the public interest prong of the Full Code Test the SFO refers to regarding facilitation payments.
The Joint Prosecution Guidance of the Director of the SFO and the Director of Public Prosecutions on the Bribery Act 2010 (here) that the SFO refers to in its “revised policies,” and that it reaffirms, states as follows concerning facilitation payments and hospitality expenditures.
“Facilitation payments
Facilitation payments are unofficial payments made to public officials in order to secure or expedite the performance of a routine or necessary action. They are sometimes referred to as ‘speed’ or ‘grease’ payments. The payer of the facilitation payment usually already has a legal or other entitlement to the relevant action. There is no exemption in respect of facilitation payments. They were illegal under the previous legislation and the common law and remain so under the Act.
Public Interest Considerations
Prevention of bribery of foreign public officials is a significant policy aspect of the Act. In the context of facilitation payments, the following public interest factors tending in favour of and against prosecution may be relevant. A prosecution will usually take place unless the prosecutor is sure that there are public interest factors tending against prosecution which outweigh those tending in favour.
Factors tending in favour of prosecution:
- Large or repeated payments are more likely to attract a significant sentence;
- Facilitation payments that are planned for or accepted as part of a standard way of conducting business may indicate the offence was premeditated;
- Payments may indicate an element of active corruption of the official in the way the offence was committed;
- Where a commercial organisation has a clear and appropriate policy setting out procedures an individual should follow if facilitation payments are requested and these have not been correctly followed.
Factors tending against prosecution:
- A single small payment likely to result in only a nominal penalty;
- The payment(s) came to light as a result of a genuinely proactive approach involving self-reporting and remedial action;
- Where a commercial organisation has a clear and appropriate policy setting out procedures an individual should follow if facilitation payments are requested and these have been correctly followed;
- The payer was in a vulnerable position arising from the circumstances in which the payment was demanded.
Hospitality and promotional expenditure
Hospitality or promotional expenditure which is reasonable, proportionate and made in good faith is an established and important part of doing business. The Act does not seek to penalise such activity.
Hospitality and promotional expenditure could, however, form the basis of offences under s1 (bribing another person) or s6 (bribing a foreign public official) and constitute a bribe for the purpose of s7 (failure to prevent bribery). Under section 1 there must be an element of “improper performance”. Under section 6, it will be necessary to show that the provision of hospitality or promotional expenditure was intended to influence the foreign public official so as to obtain or retain business, or an advantage in the conduct of business.
The more lavish the hospitality or expenditure (beyond what may be reasonable standards in the particular circumstances) the greater the inference that it is intended to encourage or reward improper performance or influence an official. Lavishness is just one factor that may be taken into account in determining whether an offence has been committed. The full circumstances of each case would need to be considered. Other factors might include that the hospitality or expenditure was not clearly connected with legitimate business activity or was concealed.
Public Interest Considerations
Prevention of bribery of foreign public officials is a significant policy aspect of the Act. When considering the public interest stage, the factors tending in favour of and against prosecution referred to in respect of “active bribery” (section 1) are likely to be relevant. A prosecution will usually take place unless the prosecutor is sure that there are public interest factors tending against prosecution which outweigh those tending in favour.”
As noted in this March 2011 post, U.K. guidance on facilitation payments and hospitality expenditures pretty much aligns the Bribery Act and the FCPA despite the obvious statutory differences. I predicted in January 2011 (see here) that enforcement of the Bribery Act will be disciplined and measured and this belief is further strengthened by yesterday’s SFO release of its “revised policies.”
As the SFO indicates in this Q&A regarding its “revised policies,” the only change “is that reference in the joint prosecution guidance to the SFO’s former policy on self-reporting has been removed.” (See here for that policy which explained that “the benefit to the corporate [in self-reporting] will be the prospect (in appropriate cases) of a civil rather than a criminal outcome as well as the opportunity to manage, with us, the issues and any publicity proactively.”
The Joint Prosecution Guidance, which the SFO reaffirms in its “revised policies,” stated as follows regarding self-reporting.
“The SFO encourages corporate self-reporting, but offers no guarantee that a prosecution will not follow any such report.”
The remainder of the “revised policy” on self-reporting (here) states as follows.
“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. That Guidance explains that, for a self-report to be taken into consideration as a public interest factor tending against prosecution, it must form part of a “genuinely proactive approach adopted by the corporate management team when the offending is brought to their notice”. Self-reporting is no guarantee that a prosecution will not follow. Each case will turn on its own facts.”
There is nothing revolutionary about any of this.
It substantively aligns with the DOJ’s Principles of Prosecution of Business Organizations (here) which states that a company’s “timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation of its agents” is one factor the DOJ will consider in deciding whether to criminally charge a business organization.”
In short, although much ink is likely to be spilled in the coming days, the SFO’s revised policies are a yawner. Speaking of the ink, before the clock struck midnight on the SFO’s “revised policies” the industry was cranking out the marketing material.
This industry participant stated as follows regarding the “revised policies” and the DOJ’s promised forthcoming guidance. “Given this activity from government regulators, it is more important than ever that companies develop a meaningful compliance program that can be adapted if needed to meet changing government expectations. A successful compliance system must adequately educate employees and create a framework that can prevent violations before they occur. [Company] has the expertise to implement a truly functional FCPA or UK Bribery Act compliance program. We can help companies protect themselves in the face of strict enforcement of these laws and constantly changing government guidance.”
This industry participant stated as follows. “Given the new [Bribery] Act’s tough penalties and the apparent ambiguity surrounding the consequences of self-disclosure, businesses may want to take extra care to comply with its provisions. Accordingly, businesses should consider seeking the advice of legal counsel in navigating this statute and its attendant revisions.”
Friday Roundup
A focus on entertainment and calling out FCPA / Bribery Act Inc. and a recent disclosure from a company that is part of FCPA history. It’s all here in the (slimmer than normal) Friday roundup.
Recent Comments From The Director of the U.K. SFO
The briberyact.com previously mentioned here recent comments made by David Green (Director of the U.K. Serious Fraud Office) in a Daily Mail article (here) that “mainstream corporate entertaining” is of little concern to the SFO. Green states in the article as follows. “We are not interested in that sort of case. We are interested in hearing that a large company has mysteriously come second in bidding for a big contract. The sort of bribery we would be investigating would not be tickets to Wimbledon or bottles of champagne. We are not the ‘serious champagne office.'”
The same can not always be said of the DOJ or SEC. Although such seemingly minor corporate entertainment expenditures have never been the sole focus of an enforcement action, several enforcement actions have included such allegations. For instance, the UTStarcom enforcement action (see here for the prior post) contained allegations about a $600 bottle of wine. The Data Systems and Solutions enforcement action (see here for the prior post) contained allegations regarding a Cartier watch. The IBM enforcement action (see here for the prior post) contained allegations about a camera. The RAE Systems enforcement actions (see here for the prior post) contained allegations about kitchen appliances, business suits, and high-priced liquor. Numerous other examples abound. One must assume that the enforcement agencies included such allegations in the resolution documents for a reason, not just to fill up paper.
Alexandra Wrage (President of Trace International) noted the U.K. / U.S. irony in this recent piece for Corporate Counsel. “[W]hereas the U.S. law permits these expenditures [facilitation payments and reasonable entertainment expenses], within reason, and then enforces when companies overstep, the U.K. prohibits them, but assures the public that they won’t be prosecuted.”
Green’s comments to the Daily Mail were also notable for his calling out of FCPA (or as the case may be Bribery Act) Inc. The Daily Mail article notes as follows. “[Green] criticised American law firms that had taken advantage of the uncertainty. ‘It is in their interest to focus attention on the Bribery Act. They put up talking heads and arrange conferences. It is a huge industry.’” Green’s comments are similar to those noted in this prior post by Kenneth Clark (the U.K.’s anti-corruption champion) who stated, in the House of Commons, leading up to the Bribery Act as follows. “I hope to put out very clear guidance [regarding the Bribery Act] to save [businesses] from the fears that are sometimes aroused by the compliance industry, the consultants and lawyers who will, of course, try to persuade companies that millions of pounds must be spent on new systems that, in my opinion, no honest firm will require to comply with the Act.”
Harris Corp.
As previously noted in this Wall Street Journal Corruption Currents post, Harris Corporation disclosed as follows in its recent annual report.
“[I]n April 4, 2011, we completed the acquisition of Carefx and thereby also acquired its subsidiaries, including in China (“Carefx China”). The consolidated revenue of the Carefx China operations for fiscal 2012 was approximately $1.4 million, or less than 0.1% of our consolidated revenue. In connection with our integration activities and the subsequent audit of the financials of the Carefx China operations, we became aware that certain entertainment, travel and other expenses in connection with the Carefx China operations may have been incurred or recorded improperly. In response, with the concurrence of our Audit Committee, we initiated an internal investigation, with the assistance of outside legal counsel, to determine whether violations of the FCPA potentially occurred. In the course of our investigation, we learned that certain employees of the Carefx China operations had provided pre-paid gift cards and other gifts and payments to certain customers and potential customers. Although our investigation is not complete, we have already taken remedial actions related to the Carefx China operations, including changes to internal control procedures, termination of the gift-giving practice, additional compliance training and termination of the employment of certain individuals. The preliminary results of the investigation have been disclosed to our Audit Committee, Board of Directors and auditors, and we have also contacted the U.S. Department of Justice and the SEC to voluntarily disclose that we are conducting the investigation and to advise that it is our intent to fully cooperate with any investigation that they may conduct with respect to this matter. We cannot predict at this time any regulatory action that may be taken with respect to this matter or any other potential consequences that may result. However, based on the information available to date, we do not believe that this matter will have a material adverse effect on our financial condition, results of operations or cash flows.”
As noted in this previous post, Harris Corp. is part of FCPA history. It is believed to be the first, and to this day only, publicly traded company to have put the DOJ to its burden of proof at trial. As noted in the post, Harris Corp. prevailed in the enforcement action (1990-1991). I noted in the previous post as follows. If non-prosecution and deferred prosecution agreements existed in 1990, would Harris have resolved the enforcement action via such a resolution vehicle? Likely yes. Yet Harris and the individual defendants all prevailed at trial.
If the conduct Harris recently disclosed gives rise to an enforcement action, will Harris likewise this time around put the DOJ to its burden of proof? Even if it has valid legal and factual defenses, not a chance. NPAs and DPAs exist today and resolving FCPA inquiries is often more about cost-beneft / risk-reward, than law and facts.
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A good weekend to all.
The U.K. Ministry Of Justice Should Say No To DPAs In The Bribery Act Context
As noted in this prior post, the U.K. Ministry of Justice (“MoJ”) has a consultation process open concerning its proposal to adopt deferred prosecution agreements. Below is the text of my letter to the MoJ urging it to say no to DPAs in the Bribery Act context. You too can make your voice heard on this issue before August 9th (see here for more information).
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This letter responds to the Ministry of Justice’s (“MoJ”) request for consultation regarding deferred prosecution agreements (DPAs) (Consultation Paper CP9/2012).
While the MoJ’s DPA proposal concerns a variety of economic crimes, it is probable that a significant percentage of DPAs, if implemented, will be used to resolve Bribery Act enforcement actions as has happened in the U.S. where a significant percentage of DPAs and related nonprosecution agreements (NPAs) have been used to resolve Foreign Corrupt Practices Act (“FCPA”) enforcement actions. Given that my primary area of expertise is the FCPA and related anti-corruption laws and initiatives including the Bribery Act, I confine my comments to potential application of DPAs to resolve Bribery Act prosecutions.
To begin, I applaud the MoJ for its wholesale rejection of non-prosecution agreements (“NPAs”) to resolve allegations of corporate criminal activity. Like the MoJ, I agree that such resolution vehicles, which are a prominent feature of the U.S. criminal justice system including in FCPA enforcement actions, are not suitable given the lack of transparency in such agreements including the lack of judicial oversight. I can only hope that the U.S. Department of Justice sees the wisdom of your decision and likewise abolishes such agreements as I have advocated.
I also applaud the MoJ for insisting, should there be DPAs in the U.K., “that there should be judicial involvement from an early stage whereby the proposed DPA is considered at a preliminary hearing before it returns for final judicial approval.” As noted by the MoJ’s consultation paper, U.S. style DPAs lack such a feature.
I am concerned however that in its consultation paper the MoJ relies upon several unfounded assertions when discussing use of DPAs in the U.S. For instance, the consultation paper asserts, as if a fact, that such vehicles have been “successfully adopted” in the U.S. and that such vehicles “support an existing culture of self-reporting of serious economic crimes.”
If “successfully adopted” means that such vehicles has resulted in an increase in enforcement actions, then yes I agree with the MoJ’s statement. After all, it is not surprising that the more options an enforcement agency has (beyond the traditional two options of prosecuting and not prosecuting) the more enforcement actions that will result. Yet, I submit that a factor in determining success ought to be quality of the enforcement action and whether an enforcement agency theory of prosecution, if subjected to judicial scrutiny and an adversarial proceeding, can meet its high burden of proof. This element of “success” is missing from U.S. style resolution vehicles replaced with a system whereby entering into such a resolution vehicle is often merely a cost/benefit exercise for a company often divorced from the law and relevant facts. I’ve called this dynamic “the façade of enforcement” and I urge the MoJ to place greater importance on quality, not quantity, in assessing “success.”
Moreover, the MoJ asserts, as if fact, that such resolution vehicles “support an existing culture of self-reporting of serious economic crimes” in the U.S. While empirical data is lacking as to the frequency of voluntary disclosures of improper conduct during this era of frequent U.S. use of NPAs and DPAs, anecdotal evidence and comments from various experts suggest that a high percentage of corporate conduct that could implicate criminal laws is not reported to the enforcement agencies. I submit that one factor driving this dynamic is that companies and its counsel have come to realize that the enforcement agency will not be diligent and complete in its application of law to facts and its consideration of mitigating facts because the enforcement agency will never have to prove its enforcement theory to anyone other than itself. In short, U.S. alternative resolution vehicles ought not be viewed as a successful or desirable export.
Regardless of the divergent views one may have as to the “success” of alternative resolution vehicles in the U.S. and whether such vehicles support a culture of self-reporting, my primary concern with the U.K. looking to the U.S. for support in considering DPAs is the material differences between U.K. and U.S. corporate criminal liability, including in the bribery context.
Under the U.S. principle of respondeat superior a business organization can face criminal liability based on the acts of any employee or agent to the extent the individual’s conduct was in the scope of their duties and was intended to benefit, at least in part, the organization. U.S. adoption of alternative resolution vehicles largely developed out of a sense of injustice when this principle was applied to organizations based on isolated conduct or conduct that occurred despite the organization’s good faith compliance efforts.
Unlike the ease in which a business organization can be subject to criminal liability under U.S. law, as the consultation paper itself notes, organization criminal liability under U.K. law is very difficult to prove and “depends on establishing that the ‘directing mind and will’ of an organization was at fault.” In short, U.S. adoption of DPAs was largely a function of general circumstances not present under U.K. law.
Moreover, U.S. use of alternative resolution vehicles in the FCPA context implicates specific circumstances not present in the Bribery Act. As the consultation paper itself notes, the Bribery Act is a unique law in that it already provides in Section 7 a unique offense to hold organizations liable that fail to adopt adequate procedures to prevent bribery. Although many, including myself, have called for the FCPA to be amended to include such a compliance defense, the FCPA currently does not contain such an exception.
In conclusion, I pose the following questions the MoJ should consider during its consultation process. Why does a law with an adequate procedures defense require the third option of a deferred prosecution agreement (the first two options being prosecute vs. not prosecute)? If a corporate has adequate procedures, but an isolated act of bribery nevertheless occurs within its organization, the corporate presumably would not face prosecution under the Bribery Act. This seems like a just and reasonable result and there is no need for a third option in such a case. On the other hand, if a corporate does not have adequate procedures (thus demonstrating a lack of commitment to anti-bribery compliance) and an act of bribery occurs within its organization, it presumably would face prosecution under the Bribery Act. This seems like a just and reasonable result. Does a third option really need to be created for corporates who do not implement adequate procedures? I submit the answer is no and urge the MoJ to reject use of DPAs in the Bribery Act context.
UK Bribery Act – Year One
Today’s post is from Robert Amaee (former Head of Anti-Corruption and Head of Proceeds of Crime at the UK Serious Fraud Office and currently of counsel at Covington & Burling – see here). Amaee is the United Kingdom Expert for FCPA Professor.
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UK Bribery Act – Year One
The UK Serious Fraud Office is yet to take enforcement action under the UK Bribery Act (“Bribery Act”). This is hardly a surprise to those familiar with the demands of an investigation into complex economic crime. The type of bribery cases that the SFO is duty bound to investigate and prosecute are precisely those that involve a heavy commitment of resource and time. The SFO is reported to currently spend an average of three and a half years and £1.5 million ($2.25 million) investigating each bribery case. These are not the Munir Patel type of bribery prosecutions that are typically handled by the UK Crown Prosecution Service (“CPS”).
Some commentators had set unrealistic expectations for the speed at which enforcement actions would appear, predicting a swift procession of dawn raids and arrests. This sense of anticipation and the inevitable anti-climax may well, at least in part, explain the findings of recent surveys, including a poll conducted by Deloitte. The poll found that fewer than one in ten of the 1200 compliance professionals polled expressed any concern about the possibility of a Bribery Act enforcement action being brought against their organisation. There appears to be little to fear from the SFO for the vast majority of those polled. In spite of the undoubted challenges that confront the SFO in the year ahead, it is important for companies and senior individuals to guard against complacency.
In the year since the Bribery Act came into force, David Green CB QC has taken over as Director of the SFO and the UK government has made tangible strides towards the adoption of a UK version of the US Deferred Prosecution Agreement (“DPA”). The new director will have little choice but to continue the SFO’s policy of guiding, assisting and engaging with responsible corporates and senior individuals, but there is no doubt that he will instil a more hard edged prosecutorial approach at the SFO than has been the case in the past. Green is a seasoned barrister who has defended and prosecuted serious economic crime cases during his 25 year career at the criminal bar. He also has prior experience of leading two prosecutions agencies. He was appointed the first director of the Revenue and Customs Prosecutions Office (“RCPO”) in April 2005, and served as director of the CPS Central Fraud Group from January 2010 until his return to the bar in April 2011.
Green began his four year term at the SFO on 23 April 2012. Since then, he has started to articulate his plans for the SFO in interviews with the Financial Times and most recently in a keynote address he delivered at an anti-corruption conference held in London on 26 June. At the conference, Green described this as a “challenging but exciting time” for the SFO. In a likely reference to the Tchenguiz case, he accepted that some of the recent “trenchant” criticism of the SFO has been justified, but stated that the SFO was “here to stay.” He warned against the “dilution” of the SFO brand by chasing “eye-catching quick results or taking short cuts” and said that he will not “sacrifice solid prosecutorial demands for easy headlines.” Green will focus the SFO’s “blood and treasures” on only the “most important cases *** that undermine confidence in UK Plc. and the City of London” and those that “undermine a level playing field.” He said that the SFO would not pursue cases of “crooks overcharging” but would look to use its “unique set up and capabilities to do what others cannot do.”
Green made no reference to the CPS Inspectorate-led review of the SFO that is currently underway, but explained that he has set about re-organising the SFO into four operational divisions; two dedicated to bribery and two to fraud. He is in the process of recruiting four senior civil servants into the “divisional head” roles. In addition, he is seeking to appoint a General Counsel to “shape and critique” cases, and a “Specialist Advisor” to “sharpen cases” and advise him on DPAs and civil settlements. Green made it clear that he is looking to bring external expertise into the organisation. He said that he wants to “foster and encourage a revolving door between private practice and the SFO” and extended an invitation to members of the junior bar, solicitors, investigators and accountants to join the SFO, either on a permanent basis or on secondment.
Green reiterated his support for the introduction of a UK DPA mechanism, stating that prosecutors should have “access to the broadest possible range of prosecutorial tools” so that they are not “outdone by the opposition.” He talked about strengthening his intelligence unit and made it clear that he would welcome a debate on whether UK whistle-blowers should be financially rewarded. He would like to “extend the reach” of the SFO and “encourage and increase self-reporting.” He expressed the view that the “advantages of self-reporting need to be articulated” so that companies are “inclined” to self-report. While he cannot give guarantees, he said that “self-reporting is a strong factor in deciding whether to prosecute or not.” If a prosecution is not in the public interest he said that the SFO is “likely to seek a civil settlement.” It is clear that the civil recovery mechanism, afforded by the UK Proceeds of Crime Act 2002, will continue to play a major role in future SFO enforcement actions.
Anti-corruption enforcement remains a priority for Green’s SFO which will continue to bring cases under the old UK bribery laws as well as the Bribery Act. Green confirmed that the SFO is currently handling four self-referrals and that eleven further cases are “being developed.” He said that most of these involve allegations of corruption. In relation to the Bribery Act, Green expressed his desire to bring cases that would help clarify the boundaries of the “adequate procedures” defence. In respect of the term “carries on business or part of a business in the UK” he warned that, in any court case, the SFO would “argue against an overly technical interpretation.”
The SFO’s priorities in relation to enforcement under the Bribery Act will become clearer in the year ahead. However, companies must not expect early answers on some of the thornier issues under the Bribery Act, such as the extent of the UK’s jurisdiction over non-UK companies; the extremities of third party liability; and the borderline between acceptable corporate hospitality and a prosecutable bribe. The SFO is likely to begin enforcement under the Bribery Act by seeking prosecutions or settlements in cases where there is clear criminal culpability, before it ventures on to tackle cases that test the boundaries of the Bribery Act. As we await further clarity from the UK, the recent US Department of Justice declination in the Morgan Stanley case provides companies with valuable insights into considerations that can successfully persuade a prosecutor not to prosecute. The relevance of this guidance to an assessment of the adequacy of a company’s policies and controls in the context of the Bribery Act will not be lost on readers of this publication. The DoJ is set to provide further assistance to us all when it launches its much anticipated FCPA guidance. This is expected in the next few weeks.
Friday Roundup
Credit when credit is due, no fear despite fear based marketing, a further Section 1504 development, and individual prosecutions in Canada, it’s all here in the Friday roundup.
Credit When Credit is Due
In this previous February 2012 post, I called out the DOJ for its deficient and misleading FCPA website in that the website did not inform the public of the DOJ’s setbacks in the Africa Sting cases, the O’Shea case, the Wooh case and the Lindsey Manufacturing cases. I ended the post by saying that the DOJ’s FCPA website ought to be improved and ought to keep citizens informed of all FCPA developments – not just those that cast the DOJ in a favorable light.
I am happy to dole out credit when credit is due and can now report that Wooh’s entry (here), O’Shea’s entry (here), the Lindsey related entry (here) and the numerous Africa Sting related entries have all been updated to reflect the final disposition of those cases.
Few Companies Concerned About the U.K. Bribery Act
Despite marketing campaigns that were often based on fear and overblown rhetoric, one year into the U.K. Bribery Act few companies have changed their compliance programs as a result and even fewer are concerned about an enforcement action being brought against their organization, according to this recent poll by Deloitte Financial Advisory Services. Specifically 24% of respondents answered “yes” to the following question – “in July 2012, one year after the UK Bribery Act enforcement began, will your company have changed its anti-corruption program to comply” and 9% answered “yes” to the following question – “one year after UK Bribery Act enforcement began, is your company concerned about a UK action being brought against your organization.”
That is pretty much what I predicted in this January 3, 2011 post that states as follows – “I don’t see how companies already subject to the FCPA and already thinking about compliance in a pro-active manner, have much to worry about when it comes to the U.K. Bribery Act …”.
Even so, the silly marketing continues as evidenced by this post “Don’t Be Lulled by a Dearth of UK Bribery Act Convictions” which begins as follows. “Be warned that the UK Bribery Act is considered to be the world’s most restrictive and far-reaching anti-corruption law to date. This measure differs in many key aspects from the US Foreign Corrupt Practices Act.”
A Further Section 1504 Development
This recent post provided an update on Section 1504 of Dodd-Frank, the so-called Resource Extraction Issuer Disclosure Provisions, an ill-conceived “miscellaneous provision” tucked into Dodd-Frank at the last minute that will substantially increase compliance costs and headaches for numerous companies that already have extensive FCPA compliance policies and procedures by further requiring disclosure of perfectly legal and legitimate payments to foreign governments.
In a further update, last week several House members wrote to SEC Chairman Mary Schapiro “regarding the status of the long-delayed final rule making.” In the letter, the House members state that the Commission “has had more than enough time to consider and respond to all of the substantive comments from industry, civil society, investors and others” and that the “issue is too serious to allow further delay.”
Canada Prosecutions
Recent media articles (see here from the Globe and Mail and here from the Canadian Press) report that “two former executives of SNC-Lavalin Group Inc. have been charged with corrupting foreign officials” under Canada’s FCPA-like law, the Corruption of Foreign Public Officials Act. Ramesh Shah (a former Vice President) and Mohammad Ismail (a former Director of International Projects) allegedly “offered payment to secure contracts for supervision and construction of the Padma Bridge and an elevated expressway in Dhaka, Bangladesh.”
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A good weekend to all.