In July 2017 the Supreme Court published its judgment in a case concerning the reporting of an individual's name, which had been mentioned during trial proceedings to which he was not a party. The individual had been arrested in respect of similar offences for which others were on trial, but a charging decision over him had not been made before the trial's commencement.
In July 2017 the Serious Fraud Office (SFO) opened investigations into the oil services company Amec Foster Wheeler Plc and the Rio Tinto mining group. One month later, the SFO announced that it would investigate corruption allegations against British American Tobacco Plc. Although the SFO did not give any further details, the tobacco giant had announced in February 2017 that it was investigating claims that it had bribed officials in East Africa to undermine anti-smoking laws.
Judgment was recently handed down in respect of the Serious Fraud Office's claim for a declaration that documents generated in the course of an internal investigation into the Eurasian Natural Resources Corporation were not subject to legal professional privilege. The judgment clarifies that because investigation and prosecution are not part of the same amorphous process, documents generated in the investigation phase do not, by default, benefit from the protection of litigation privilege.
A group of alleged fraudsters are being prosecuted after stealing personal details from the Civil Service Sports Council membership list and using them to fraudulently claim tax credits. Separately, research has found that one in five victims of identity fraud between 2012 and 2015 were company directors. In particular, criminals are using publicly available data from Companies House to target these individuals.
Charges in respect of corruption offences under Section 1 of the Prevention of Corruption Act 1906 and Section 1 of the Criminal Law Act 1977 were recently brought against the UK subsidiary of German logistics company FH Bertling and a number of its former employees and other individuals associated with the company. The offences are said to have primarily enabled FH Bertling to retain or win contracts for the supply of freight forwarding services to a North Sea oil exploration project.
The much-debated Criminal Finances Bill recently received royal assent, becoming the Criminal Finances Act 2017. When it comes into force, the act will introduce significant amendments to the Proceeds of Crime Act 2002. From a corporate crime perspective, the most noteworthy of these changes are the introduction of the new corporate offence of failure to prevent the facilitation of tax evasion, revisions to the suspicious activity reporting regime and the creation of unexplained wealth orders.
The long-awaited Criminal Finances Bill recently received royal assent, creating the new wide-reaching offence of corporate failure to prevent the facilitation of tax evasion. In other news, given the outcome of the general election, it is unclear whether the prime minister will continue with plans to abolish the Serious Fraud Office. Further, the Financial Conduct Authority recently obtained a decision which limits the identification principle in respect of its statutory notices.
Following a six-week retrial, Stylianos Contogoulas and Ryan Reich, both former traders at Barclays, were recently acquitted of charges of conspiracy to defraud in relation to their involvement in London Interbank Offered Rate manipulation. The pair had first been tried alongside four others in April 2016. While their co-defendants had been convicted, the jury was unable to reach verdicts in relation to Contogoulas and Reich.
In a recent decision, the Supreme Court provided an interpretation of the identification principle under Section 393 of the Financial Services and Markets Act 2000. In doing so, the Supreme Court has raised the threshold for identification in Financial Conduct Authority notices and reversed the wider approach taken by the Upper Tribunal and the Court of Appeal.
The High Court recently dismissed the judicial review claim brought by Unaoil and a number of its executives against the Serious Fraud Office, in respect of the lawfulness of a letter of request issued to the Monegasque authorities to provide assistance with the ongoing investigation in the United Kingdom. In its judgment, the court rejected the claimant's submissions regarding mutual legal assistance and the letter of request.
Businesses should by now be compliant with the Modern Slavery Act 2015's reporting provisions, which require reporting businesses to provide a statement setting out the measures that they have taken to eliminate slavery and human trafficking. However, even a cursory examination of many business websites demonstrates that full compliance remains scarce.
According to records released to Parliament by Defence Minister Harriett Baldwin, the Ministry of Defence has referred 44 cases of corruption in relation to defence contracts to law enforcement agencies since 2011. Of the allegations, four related to bribery of foreign public officials and 29 related to UK companies.
As part of sweeping changes proposed in the Criminal Finances Bill 2016, the government plans to enable law enforcement, regulatory and prosecutorial bodies to apply to the High Court for unexplained wealth orders. If obtained, these will require individuals to explain their interest in, and ownership of, property valued at more than £100,000, where their income alone cannot provide sufficient explanation for their ownership of the property.
The Serious Fraud Office (SFO) recently announced that it would cease its investigation of the Soma Oil & Gas Group relating to allegations of corruption in Somalia. The SFO stated that while there were reasonable grounds to open the investigation, "a detailed review of the available evidence led… to the conclusion that the alleged conduct, even if proven and taken at its highest, would not meet the evidential test required to mount a prosecution".
A deferred prosecution agreement was recently reached between the Serious Fraud Office and Rolls-Royce and approved by the High Court. The agreement covers the conduct of Rolls-Royce plc and Rolls-Royce Energy Systems in relation to agreements to make corrupt payments, the concealment of intermediaries and a failure to prevent briberies and inducements in numerous jurisdictions.
The chief executive of the Financial Conduct Authority (FCA) recently stated that a shift in social attitudes to financial conduct regulations, whereby "everyone knows the rules of the game, and then everyone sticks to them", is essential to combating financial crime – as is the more meaningful and effective use of technology. While directly applicable to entities regulated by the FCA, these messages have relevance to many corporates.
There has been much speculation recently as to what a Trump presidency might mean for US-UK bilateral relations. As such, it is timely to consider Trump's previous statements on crime, his apparent attitude to the 'special relationship' with the United Kingdom and the wider context in which the Trump administration will sit, in order to consider the likely approach to the investigation of financial crime and the potential impact on US-UK cross-border investigations.
The United Kingdom's withdrawal from the European Union could affect the regulatory and enforcement environment in respect of economic crime, particularly in regards to legislation, the effect of economic uncertainty on the prevalence of economic crime and the United Kingdom's relationship with EU law enforcement bodies and its ability to continue fighting economic crime. While less likely to make headlines, these issues should nonetheless be at the forefront of the government's considerations.
In May 2016 the government announced that it would publish a consultation paper regarding its goal of expanding the scope of corporate offences to include other economic crimes, such as money laundering, false accounting and fraud. Although the government's promised consultation has yet to occur, an extension of the law in this area was referred to at the recent Cambridge Symposium on Economic Crime.
Following a consultation by Her Majesty's Revenue and Customs on making failure to prevent the facilitation of tax evasion a corporate offence, the offence has been incorporated into Part 3 of the Criminal Finances Bill, which was recently presented to Parliament. As drafted, the offence has extra-territorial jurisdiction and includes both UK tax offences and overseas tax fraud offences where the overseas offence would amount to an offence in the United Kingdom.