Anti-Money Laundering and Corruption Measures: The DPA factor

The implementation of anti-corruption programmes slid down the agenda when doubts were raised over whether the UK Bribery Act 2010 was actually going to be used as stick to beat companies with. If prosecuted properly, Section 7 of the Act is difficult to argue with. A relevant commercial organisation is guilty of an offence if a person ‘associated’ with the company bribes another person intending to obtain or retain business for the company, or to obtain or retain an advantage in the conduct of business for the company. It is a defence for the company to prove that it had in place adequate procedures designed to prevent persons associated with the company from undertaking such conduct. The maximum penalty is imprisonment for a term not exceeding 10 years, or to a fine, or to both.

Plenty of guidance has been issued by the Secretary of State and others on the meaning of ‘associated person – relevant commercial organisation – adequate procedures’ and the like. However, it stops short of providing an easily accessible template and ‘adequate procedures’ has been interpreted widely across sectors where differing risks arise. It was always going to be impossible for the Secretary of State to provide a recipe for all tastes, but the Section 7 offence was recently pushed up the agenda again when the Serious Fraud Office issued letters to selected companies inviting them to speak with the SFO regarding a Deferred Prosecution Agreement. The DPA has not been used in the UK so far but it has been part of the US enforcement tool kit for quite a few years and its application has not been without controversy. The UK version incorporates some important distinctions (such as the nature of judicial scrutiny), but the SFO has been slowing turning up the heat on this topic over the last year and it won’t be long before the media latch onto the first DPA.

The SFO radar may have turned upon these companies as a result of straightforward investigation or a self-report but more companies are seeking advice on how they should protect themselves in an expanding economy. For example, I have certainly seen an increase in the number of multi-nationals issuing public notices regarding their relationships with suppliers and common themes arise. Some topics in a company’s policy are sector specific but here is a ‘hit list’ arising in most:-

  • A consideration of the relevant Anti-Corruption Laws and International Commitments.
  • The need for an Ethics Management System
  • Reviewing the Disciplinary Regime
  • The establishment of an Internal Investigation Group
  • Monitoring of Fraud and Corruption Risk Management
  • Reviewing Relations With Third Parties
  • Rationalising the application of Penalties and Internal Sanctions
  • Improving lines of communication for Whistle Blowing, Complaints, Requests, Suggestions
  • Identifying Conflicts of Interest
  • Avoiding Nepotism
  • Producing guidance on Presents, Gifts and Hospitality
  • A policy on Contributions to Political Parties, Charitable Donations and Sponsorship
  • Ensuring the Safeguarding of Assets
  • Integrating Risk Analysis within Accounting Records
  • Organising Staff Training
  • Monitoring of The Policy

JMW is a full service law firm offering comprehensive assistance to companies concerned with their exposure to risk across a broad range of sectors. The policy of – Prevent, Protect, Defend (in that order) is something our clients appreciate and we can discuss a client’s requirements without obligation so that companies can be offered a cost effective solution.

Evan Wright is a partner in the Business Crime and Corporate Regulation team. 

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