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Firms suspected of Bribery Act offences may be investigated, SFO Director says

The Serious Fraud Office (SFO) is reviewing organisations' compliance with new UK bribery laws and has identified some businesses that it may investigate, the Director of the SFO has said.08 Nov 2011

In a speech at Pinsent Masons' London office Richard Alderman told construction industry representatives that the SFO was working with some businesses where it had identified "suspicions of bribery" occurring after the UK Bribery Act came into force on 1 July. The SFO is an independent Government department that investigates and prosecutes serious or complex fraud and corruption. Alderman said the body was considering initiating complex investigations into some of the cases currently under review.

"We are finding suspicions of bribery after July 1st by various corporations," Alderman said.

"What we have been doing in a few instances is inviting the corporation to come and talk to us and explaining to them that we believe they may have a problem. We are giving them the opportunity to work with us on how this problem is going to be remedied and indeed what is needed in order to ensure that there is a proper anti-corruption culture. We are giving them the opportunity to work with us and I believe that that is the right approach," he said.

"There will also be instances of alleged bribery where we decide that an approach to the corporation would not be right and that we must start to develop the investigation ourselves. These investigations are going to be complex and will range across many jurisdictions. There are some [cases] we are considering now. This will happen," he said.

Under the Bribery Act companies can be found responsible for bribery carried out by its employees without its knowledge or consent. The Act also introduced the offence of bribing a foreign public official, even if that person has demanded a bribe.

UK companies and partnerships can be found to be breaking the law no matter where alleged acts of bribery take place. Foreign companies which operate in the UK could also face prosecution regardless of where the alleged bribery has taken place, unless the suspect activities are permitted locally.

The Act also makes it an offence for businesses to fail to prevent bribery by people working for or on behalf of a business. Companies can escape liability if they show that they have 'adequate procedures' designed to prevent bribery in place. 

Under section two of the Act it is an offence if a person requests, agrees to receive, or accepts an advantage, financial or otherwise, with the intention that they or someone else perform a "relevant function or activity" improperly. The maximum penalty for individuals found guilty of bribery under the Act is 10 years' imprisonment and an unlimited fine. 

In his speech Alderman said that the SFO was targeting complex cases of corruption and was avoiding cases where it could more easily identify non-compliance with the laws. The SFO has been criticised for so far failing to prosecute offences under the Bribery Act. A court clerk became the first person to be convicted for an offence under the Act last month following a prosecution by the Crown Prosecution Service. The SFO is the lead agency for investigating and prosecuting offences under the Bribery Act.

“Some people have said that the SFO will be going for low hanging fruit," Alderman said.

"I know what the low hanging fruit are and I’m sure that in a week or so we could find half a dozen cases or more. But that is not our approach. We are looking for the more difficult cases and I’m under no illusions about this. A number of the cases that we need to deal with are going to be amongst the most challenging that the UK criminal justice system will have seen. I have to say that this seems to me to be a reason for doing them and not a reason for not doing them," he said.

Barry Vitou, anti-corruption law expert at Pinsent Masons, the law firm behind Out-Law.com, said that SFO enforcement action under the Bribery Act was inevitable and that businesses should not rely on the SFO not turning words in actions.

"Businesses should not wait to find out if the SFO will enforce the Bribery Act," Vitou said.

"Enforcement action will follow as surely as night follows day. Businesses should not fall into the trap of thinking that the various statements made by the SFO in the past year or so amount to 'boy crying wolf'," he said.

Vitou, who operates thebriberyact.com website with other anti-corruption lawyers, was a host at the construction industry gathering at Pinsent Masons on Friday.

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