The bribery Act 2010 Five years on

Transcription

1 Smart decisions. Lasting value. The bribery Act 2010 Five years on Andrew Whittaker, Senior Manager, Forensic and Counter Fraud Services 2016 Crowe Clark Whitehill LLP 1

2 Can anyone name this? No points for saying it s an aeroplane! 2016 Crowe Clark Whitehill LLP 2

3 De Havilland Comet 4B 2016 Crowe Clark Whitehill LLP 3

4 Lynden Scourfield, Michael Bancroft & David Mills 2016 Crowe Clark Whitehill LLP 4

5 Agenda A quick reminder of the law Initial reactions Adequate procedures? Some red flags The Act in practice Conclusion Crowe Clark Whitehill LLP 5

6 Bribery Act 2010 what does it do? Creates offences for individuals: - offering (s.1) or receiving (s.2) a bribe - bribing a foreign public official (s.6) New corporate offence of failing to prevent bribery (s.7) defence of adequate procedures to prevent bribery Global jurisdiction includes agents Crowe Clark Whitehill LLP 6

7 What do we mean by bribery? Bribery Act definition: A financial or other advantage intended: to induce a person to perform improperly a relevant function or activity, or to reward a person for the improper performance of such a function or activity Financial or other advantage: To be determined as a matter of common sense by the tribunal Relevant function or activity: All functions of a public nature and All activities connected with a business, trade or profession 2016 Crowe Clark Whitehill LLP 7

8 Facilitation payments Payments made to an official to perform their duties or to speed-up that performance. They are illegal! 2016 Crowe Clark Whitehill LLP 8

9 Bribery Act 2010 Initial reactions As a result of the new legislation and enhanced enforcement regime, businesses urgently need to examine their existing anticorruption measures, benchmark against industry norms, and assess what improvements should be made as a priority. The changes in working practices that may be required as a result of this legislation can be difficult and slow to implement, especially in global businesses. Organizations should be taking action urgently to be prepared. EY The UK Bribery Act has a massive impact on organisations around the world. PWC 2016 Crowe Clark Whitehill LLP 9

10 Bribery Act SME research % had heard of the Bribery Act Of these: Greater awareness in firms that export to high-risk areas 74% unaware of MoJ guidance 24% had sought professional advice median cost of 1,000 Only 33% had assessed the risk Only 42% had put any procedures in place 6% reported staff had been asked for bribes: China (most common) Russia Saudi Arabia Crowe Clark Whitehill LLP 10

11 MoJ Guidance adequate procedures 6 principles: 1. Proportionate procedures 2. Top-level commitment 3. Risk assessment 4. Due diligence 5. Communication (including training) 6. Monitoring and review Crowe Clark Whitehill LLP 11

12 Adequate procedures: 1. Proportionate procedures Proportionate to the risk, not the size of the business. Policy, strategy & implementation. 2. Top-level commitment Board or owners zero tolerance. A commitment to carry out business fairly, honestly and openly. Involvement in antibribery activities. 3. Risk assessment Periodic, informed and documented. Standalone or combined with other risk assessments, e.g. fraud risk. Five areas to consider: Country, Sector, Transaction, Business opportunity, Business partnership. 4. Due diligence Not only of supplier or customer but of those acting on behalf of the organisation, e.g. agents and intermediaries. A Google search is not enough. 5. Communication ABC policy and strategy must not sit on the shelf. Must be communicated (regularly) and implemented. Enhances awareness and fosters an ABC culture. Training provides knowledge and understanding 6. Monitoring & review Risks may change over time, as may the organisation (scale and activities). Environmental scanning required Crowe Clark Whitehill LLP 12

13 Indicators of bribery Unexplained invoices or items billed Fees for Administration, Inspection, Consultancy, etc. Invoices being overpaid Payments to different bank accounts/jurisdictions Payments through a third party Agent used without good reason Advance payments High performance in a high risk jurisdiction Frequent hospitality Requests for donations to charitable organisations Missing documentation Meetings not recorded Unusual decisions By-passing standard procedures Crowe Clark Whitehill LLP 13

14 The Act in operation A high bar to reach Prosecutions require either: Personal authority of the Director of Public Prosecutions, or Personal authority of the Director of the Serious Fraud Office Expensive to investigate and prosecute Rolls Royce case cost 12.9m just to investigate Only two reported SFO prosecutions using the Bribery Act: Sustainable Agroenergy Plc and Sustainable Wealth Investments UK Ltd 13 years imprisonment for s.2 offence and 6 years imprisonment for s.1 offence Sweett Group s.7 Failing to prevent million 16 prosecutions by CPS, none for s.6 or s.7 (to Feb 2015) All simple cases e.g. Li Yang, offering a bribe to pass his dissertation Crowe Clark Whitehill LLP 14

15 Deferred Prosecution Agreements Came into force in February 2014 Supervised by a Judge Defendant agrees to a course of action Does not mean action against individuals will not be taken 3 DPAs so far: Standard Bank xyz Ltd Rolls Royce A key factor is early disclosure (self-reporting) to SFO i.e. no attempt at a cover up Crowe Clark Whitehill LLP 15

16 Some final thoughts Pre-Bribery Act legislation is still available for pre-bribery Act conduct Conspiracy offence (s.1 Criminal Law Act) also available, e.g. HBOS three If a US connection then FCPA legislation will also apply SEC much more aggressive than SFO 2016 Crowe Clark Whitehill LLP 16

17 Any Questions Thank you Andrew Whittaker Phone Crowe Clark Whitehill LLP is a member of Crowe Horwath International, a Swiss verein (Crowe Horwath). Each member firm of Crowe Horwath is a separate and independent legal entity. Crowe Clark Whitehill LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath, or any other member of Crowe Horwath and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath or any other Crowe Horwath member Crowe Clark Whitehill LLP 2016 Crowe Clark Whitehill LLP 17 Crowe Clark Whitehill LLP is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales and is authorised and regulated by the Financial Conduct Authority.