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Information Technology

United Kingdom

In 2002 a series of reports highlighted the failure of major IT projects in the public sector and the problems encountered in IT procurements which followed the Private Finance Initiative model. A guidance document published by the Office of Government Commerce identifies a number of commercial principles that underpin large-scale IT procurements and sets out a balanced approach to IT contracting.

Offshore outsourcing of IT services can realize significant cost savings and give companies a competitive advantage: India, the Philippines and China are all popular outsourcing destinations. However, many factors can reduce the projected gains. This form of outsourcing also creates additional business risks associated with issues such as geopolitical stability and business continuity.

In a recent case Justice Laddie confirmed some of the principles from Durant, in which the Court of Appeal adopted a narrow interpretation of certain key terms under the Data Protection Act 1998. Considered alongside Durant, the case therefore provides some further helpful guidance with regard to some of the fundamental principles of the act.

If the devil is in the detail, then while an outsourcing contract consists of many component parts, the detail of the outsourced solution/service is to be found in the client requirements and supplier solution (or service description) documents. Certain steps can reduce the likelihood of disputes arising and limit the impact of those disputes that do.

Disaster recovery and business continuity planning requires the taking and management of some form of back-up or replica copy of the company's information and data, which inevitably means needing to address the potential impact of the Data Protection Act 1998 and the more recent Freedom of Information Act 2000.

White Collar Crime

International

As a result of the Agreement for the Mutual Enforcement of Debarment Decisions between a number of multilateral development banks, the financial risks for companies that do business in the developing world have multiplied overnight. The recent debarment of Macmillan Publishers Limited from World Bank-funded projects has put the issue in the spotlight.

A total of 38 countries have agreed to renew their efforts to prevent, detect and investigate foreign bribery. Measures initiated by the Organization for Economic Cooperation and Development (OECD) update the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. An OECD report, due in March 2010, will doubtless be critical of any country that fails to rise to the challenge.

United Kingdom

The government is grappling with the most appropriate approach to corporate criminal liability in the context of serious fraud and corruption. Civil recovery orders can sometimes appear too lenient, but a criminal conviction (whether or not it follows a negotiated plea agreement) can spell the end of a successful business. Deferred prosecution agreements could be the way forward, but raise several issues of their own.

The first prosecution under the Bribery Act was recently announced amid continuing concerns about the act's expansive jurisdictional reach and the approach to its enforcement. Although it is not the result of a multimillion-dollar bribery investigation against a corporation, such a prosecution may not be far away; international entities should conduct a gap analysis and upgrade their policies and procedures.

The Financial Services Authority has published a consultation paper entitled "Financial Crime: a guide for firms". As well as a dedicated anti-money laundering section, it includes a thematic review of how banks manage their money-laundering risks, focusing on their management of high-risk customers (including politically exposed persons), correspondent banking relationships and wire transfer payments.

The director of the Serious Fraud Office (SFO) has made clear that he intends to take a hard line on Bribery Act offences. His comments are particularly significant for larger companies and foreign companies that have chosen to list on the London Stock Exchange. He has also called on companies to work with the SFO to blow the whistle on their rivals.

Companies with operations in the United Kingdom have only a matter of days to prepare before the Bribery Act 2010 comes into force. Although anti-bribery and corruption laws are nothing new, the act will enable the courts and prosecutors to respond more effectively to offences, whether committed in the United Kingdom or abroad, by companies or individuals.

Hardly a day passes without a revelation that a respected company is under scrutiny for an alleged misdemeanour. Internal investigations can provide an early warning of imminent problems and help a company to avoid the devastating consequences of a regulatory investigation. However, unless the right approach is followed, an internal investigation into possible wrongdoing can make matters worse.

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