Serious Fraud Office brings its first prosecution under the Bribery Act 2010 with more to come

1 November 2013 |

Two years after the Bribery Act 2010 coming into force, the Serious Fraud Office (“SFO”) has started its first prosecution under the Act.

The facts

The charges are against three individuals employed by an investment company alleged to have been responsible for fraud involving the sales and marketing of bio-fuel investment products. The SFO uncovered an alleged £23m fraud and have charged the individuals with the offences of giving and receiving a financial advantage under the Bribery Act 2010. The case is expected to come before the UK criminal courts in the early part of 2014.

Comment

When it first came into force in July 2011 the Bribery Act was regarded as the toughest piece of legislation in this area in the world and many commentators expected a rash of prosecutions. That, however, has not materialised and, apart from two previous prosecutions (both of which could have also been brought under previous anti-corruption legislation covering the public sector) this is the first proceeding exclusively under the new legislation and also the first initiated by the SFO.

However, the SFO’s Director-General, David Green, revealed recently that it had eight Bribery Act investigations under active review while the City of London police have also indicated that reported allegations of bribery are increasing.

Unfortunately, this first case does not involve raise the prospect of the employer company being guilty of an offence under the Bribery Act due to its employees acts where it cannot demonstrate that it had “adequate procedures” in place to prevent bribery taking place. UK business has been waiting for an indication of how the courts will approach the meaning of “adequate procedures”. It looks now as if it will have to wait for one of the other cases in the pipeline to reach the courts before such guidance become available.

While the SFO and City of London Police talk of increasing Bribery Act activity, the Government has stated that it is considering relaxing some of the Bribery Act provisions – in particular in relation to facilitation payments. The government is keen to reduce the perceived burden of red tape and address concerns of British exporters that their competitiveness in certain markets around the world is significantly adversely affected by the Act. At the same time, a survey conducted by Ernst and Young has revealed high levels of UK respondents expressing concern that bribery is prevalent in their particular market and is not being properly policed.

The impact of the Bribery Act continues to be an area of concern for all businesses. We will continue to report as further cases arise and hopefully, guidance emerges from the courts.

Abbiss Cadres offer expert advice on the impact of the Act as well as compliance audits and training sessions to ensure that your organisation is aware of both the Act’s broad scope as well as practical strategies for compliance.

Resources

The first prosecution under the UK Bribery Act 2010

The UK Bribery Act came into force on 1 July 2010 as the FSA announces a corruption review

Ernst and Young survey

For further information or to discuss the issues raised, please get in touch.

The author


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