Whither the UK Bribery Act?
It is hard to understand what is really going on these days with the Serious Fraud Office and the UK Bribery Act. Here in the US, the Justice Department and Securities and Exchange Commission are clear about their intentions and many of their policies. That makes the work of the FCPA Paparazzi a lot more interesting. I feel sorry for the UK Bribery Act Paparazzi, assuming that there is one.
Since July 2011, the SFO and the UK authorities have become entangled in a number of issues – whether or not the UK should adopt a voluntary disclosure program akin to the United States and precisely what should be the prosecution standards for the UK Bribery Act.
David Green, the new head of the Serious Fraud Office, made clear in a public statement that the SFO was not interested in prosecuting companies or individuals for lavish meals or entertainment. He mocked that the SFO was not the Serious Champagne Office. Some have taken this comment to mean that the SFO will only focus on “serious” bribery violations and not those that relate to champagne or lavish entertainment.
Things have become even murkier once it was disclosed that the Ministry of Justice had retracted its guidance on the issue of gifts, meals, travel, and entertainment; and facilitation payments.
It is hard to square what exactly is going on with the UK Bribery Act. The SFO seems to be caught in the middle – on the one hand they want to be aggressive prosecutors and the other they wave away whole areas of concern as immaterial. In some respects, the SFO is having trouble defining itself as a prosecution agency or a regulatory agency dedicated to continuing consultations to companies falling under UK Bribery Act “regulation.”
The political winds in the United Kingdom have not changed very much. The business community is strongly opposed to the UK Bribery Act; the Ministry of Justice continues to strangle the SFO with budget cuts and resource limitations; and the SFO acts inconsistently when it comes to enforcement or regulation of companies.
Whatever is occurring across the pond, it certainly is not the way to run an aggressive enforcement program. There is very little evidence so far that the SFO has launched any new, major investigations, except for a few blips here and there. As I have said on many occasions, the SFO is likely to tag onto global prosecutions involving companies negotiating settlements with the Justice Department and the SEC, akin to resolution of the BAE and Innospec cases years ago.
For compliance officers, it is hard to get a company’s attention on UK Bribery Act risks when the message out of the United Kingdom vacillates. It will be interesting to see what new language comes out in the revised guidance sections. It is likely that there will be a relaxation of some of the requirements but who knows? It depends on who is in charge and that is a very difficult question to answer these days.
Whatever happens, we can count on one thing – the UK Bribery Act Paparazzi will be in full action mode with reams and reams of paper being written to try and continue the “scare” campaign, warning companies, compliance officers and everyone else that the SFO is abiut to launch a major investigation against their companies.
As Charlie Brown was apt to say, “Good Grief.”
Regardng your comments about “it is hard to get a company’s attention on UK Bribery Act risks when the message out of the United Kingdom vacillates” I suggest that compliance officers remember that virtually everything that the UK Act prohibits can be prosecuted under Federal or state US law, depending on the facts. Thirty six states have statutes, 18 are felonies if the circumstances are right, and the Feds have several statutes (mail/wire fraud, Travel Act, etc.) at their disposal. So there should be more than enough incentive, regardless of how the SFO sorts this matter out.
Of course, how the U.S. proceeds with its own program, which has been pretty seriously enforced to date, will depend on the outcome of the upcoming election and any changes in policy/direction that come from that outcome at the Department of Justice and the SEC. As Mr. Wilson points out, there is a significant framework in place in the U.S. at both the Fed and state level. The policy following the election on actual enforcement and whether there will or will not be areas of enforcement focus/intiatives will be the rub. At least the Justice Department won’t be concentrating on Roger Clemens next year.