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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.
