The House of Lords Bribery Act Committee published its final report "The Bribery Act 2010: post-legislative scrutiny" on 14 March 2019. Yesterday the Government ("HMG") published its response to the thirty-five conclusions and recommendations in the report which focus on the Act itself (including the corporate offence of failing to prevent bribery), the guidance accompanying the legislation; the impact on SMEs and DPAs.
HMG confirmed that the Bribery Act will continue to apply to all UK companies including SMEs. The main focus of enforcement, however, is on high value transactions in international markets and in particular, large scale public procurement or similar tendering exercises where predominantly only the largest businesses operate. There are no plans to update the guidance accompanying the Act to give more specific examples either of adequate procedures to prevent bribery or acceptable corporate hospitality. Instead HMG noted that businesses should consult qualified legal and compliance professionals when evaluating their organisation's compliance or, in the case of SMEs seek the support of trade bodies such as the federation of Small Businesses. HMG stated that it is committed to increasing awareness of the Act.
HMG confirmed that it is not the role of the SFO to give advice in individual cases.
There are no plans to legalise facilitation payments. In response to the Committee's recommendation that UK companies should be provided with support on corruption issues in the countries to which they export HMG referred to the DFID-funded Business Integrity Initiative which is currently undertaking pilot work in Kenya, Mexico and Pakistan which aims to identify appropriate ways to support UK companies operating in these markets and will provide new guidance and tools for staff in post. The Department for International Trade ("DIT") is helping DFID to connect with UK businesses who could benefit from this support. Embassy staff will be given guidance on "how to report offences" and guidance on "how to promote standards of trade integrity". It is not clear, therefore, whether companies will be offered in country support to deal with corruption issues or whether embassy staff will form part of the enforcement network. HMG said "Officials do not take up specific cases with foreign governments, but HMG, as part of or economic diplomacy work, is able to raise more general issues where, for instance, companies report a lack of transparency, slow processing of documents, inconsistency in applying regulations and taxes etc." Further export guidance is available on the newly launched DIT website great.gov.uk to which HMG will be adding market specific integrity content.
There are no plans to alter the legislation governing the DPA process. HMG confirmed that a DPA is not an alternative to the prosecution of individuals who commit wrongdoing and noted, pointedly that prosecution decisions are a matter for the prosecution agencies. The Committee recommended that, in negotiations for a DPA, the cooperation of a company must include provision of all evidence which might implicate any individuals, however, senior, who are suspected of wrongdoing. In response, HMG said that "the Director of the SFO will shortly publish guidance for corporates who wish to self-report, setting out what factors may be considered as indicating full and genuine cooperation , a pre-requisite before any consideration of inviting a company to enter DPA negotiations". This will include assistance that is judged by the prosecutor as genuinely proactive which goes above and beyond what the law requires, identifies wrongdoing and those responsible, no matter how senior, and the provision of "all available evidence that might implicate any individuals". It remains to be seen how that guidance will deal with issues of privilege.
HMG outlined the steps it has taken to implement the OECD's recommendations following criticism by the OECD that there is a lack of cooperation and coordination in the UK between the many different bodies involved in the investigation and prosecution of bribery. HMG expanded the SFO-led Bribery and Corruption Threat Group to include the following Government Departments - International Trade, Defence, COPFS and UK Export Finance – which will now join the SFO, CPS, DFID FCO Home Office, HMRC, MOD Police, Regional Organised Crime Unit Network and the NCA. HMG also stated that coordination mechanisms have been put in place between the FCA and SFO to discuss investigations , sharing of intelligence and to consider whether bribery matters should be taken forward either by the SFO, the FCA or both in a coordinated way. Further HMG has established the National Economic Crime Centre (NECC) consisting of the NCA, FCA, HMRC, City of London Police, CPS, Home Office , SFO and Private Sector to coordinate the overall law enforcement response to economic crime.
In the event of a no deal Brexit, HMG will move law enforcement cooperation from the European Arrest Warrant and the European Investigation Order to alternative, non-EU mechanisms. These will include greater reliance on Interpol, Council of Europe Conventions and bilateral channels.
In summary HMG are set to continue with the current anti-corruption regime and have resisted the Committee's recommendations for more specific guidance on what constitute adequate procedures to prevent bribery. The availability of support for exporters operating in challenging jurisdictions will continue to be limited meaning that companies will have to continue to work closely with their compliance teams and legal advisers to ensure their operations do not expose them to risk of prosecution in the UK for the activities of their employees and agents overseas. The DPA regime has the unwavering support of HMG despite the recent collapse of investigations and prosecutions against individuals named as wrongdoers in DPAs (e.g. Tesco and Rolls Royce). HMG see the DPA as an important tool to encourage self-reporting of wrongdoing and cooperation with investigations into bribery allegations. It is not clear how HMG have concluded that the DPA regime is effective at encouraging self-reporting when the number of self-reported cases under investigation by the SFO is extremely low. We will have to wait and see what levels of cooperation the SFO will require to unlock a DPA in the future – however there is a real risk that the fundamental principle that a Defendant company is entitled to seek and obtain privileged legal advice may be under threat.
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