On 09 October 2012 the Serious Fraud Office (SFO) published revised statements of policy governing self-reporting, facilitation payments and business expenditure in relation to criminal liability under the Bribery Act 2010.
The revised statements are set against a background of a new SFO director David Green CB QC, who has, since his arrival, indicated his intention to adopt a more hard edged prosecutorial approach, focused on investigating and prosecuting only ‘top drawer’ fraud and corruption, prioritising cases that are beyond the competency of other investigating bodies. Amongst Green’s identified priorities is a determination to send out a clear signal that the SFO is prepared to show its teeth more often than it has in the recent past commenting that
"a perception has emerged that we are more inclined to settle than prosecute … I think there is a need to rebalance the focus between prosecution and civil settlement."
The SFO have identified the purpose behind the revised statements is to:
restate the SFO’s primary role as an investigator and prosecutor of serious or complex fraud, including corruption
ensure there is consistency with other prosecuting bodies; and
meet certain OECD recommendations.
The revised statements reaffirm the SFO’s previous position in relation to facilitation payments and business expenditure.
In relation to facilitation payment they have confirmed
"It is wrong to say there is no flexibility. Facilitation payments were illegal before the Bribery Act 2010 came into force and they remain illegal under the Act. Whether or not the SFO prosecutes in relation to facilitation payments will always depend on (a) whether it is a serious or complex case which falls within the SFO’s remit and, if so, (b) whether the SFO concludes, applying the Full Code Test in the Code for Crown Prosecutors, that there is an offender that should be prosecuted.’
In relation to hospitality based business expenditure their position remains that ‘hospitality or promotional expenditure which is reasonable, proportionate and made in good faith is an established and important part of doing business. The Act does not seek to penalise such activity’. The new statement of policy expressly recognises the important role of bona fide hospitality but goes on to confirm that the SFO will prosecute offenders who disguise bribes as business expenditure (hospitality and the like), where necessary and appropriate.
There is however a clear shift in relation to their approach to self reporting, demonstrated by the removal of the presumption in favour of civil settlements where self reporting has taken place. The SFO have confirmed that this presumption will not apply in any circumstances. In addition they have stated that "the SFO offers no guarantee that a prosecution will not follow any such report" and the SFO’s former guidance on self-reporting has been removed from its website without warning. The status of a self report is now relegated to simply a factor to be considered by a prosecutor in determining whether a prosecution is in the public interest. In order to qualify as a public interest factor, a self-report must be part of a genuinely proactive approach by the company which includes consideration of any remedial action taken by the company. This shift gives corporates an even more difficult task when considering whether to self report.
Whilst the practical impact of these updates to SFO policy is minimal, their existence suggests that bribery and corruption remains a high priority on the SFO’s agenda. Although the lack of corporate prosecutions so far could suggest that the Act has not had the impact it was headlined to have when first introduced, the sheer time complex investigations and proceedings of this nature take combined with the lack of retrospective effect is more likely to explain the absence of any key prosecutions so far. Time will tell whether the SFO’s new director is able to fulfil his aim of finding the first big case to bring under the Bribery Act.
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