Bribery Update - BAE Systems, Amec and the Bribery Bill
There have recently been a number of important developments in the enforcement and reform of the UK's bribery laws.
BAE Systems - Threatened Prosecution
On 1 October 2009 the Serious Fraud Office (SFO) announced that it intended to seek the Attorney General's consent to prosecute BAE Systems for offences relating to overseas corruption. This follows an investigation carried out by the SFO into the business activities of BAE Systems in Africa and Eastern Europe.
BAE Systems reiterated its innocence and has said that it intends to defend any prosecution. Unless the SFO and BAE Systems can agree to either a civil settlement, or a criminal plea, a significant trial is on the horizon. The difficulty for BAE Systems is the size of the penalty that the SFO wishes to impose (reportedly between £350m and £500m) and the risk of automatic and perpetual debarment from EU public sector contractors in the event of a criminal conviction.
Amec plc – Agree Civil Settlement with SFO
On 26 October 2009 Amec plc became the second company to agree to a civil recovery order with the SFO. Amec agreed to pay almost £5m for the inaccurate accounting of irregular payments associated with a project in which Amec is a shareholder.
The civil settlement demonstrates a clear desire on the part of the SFO to dispose of appropriate cases on a civil basis in return for companies self-reporting unlawful conduct to it and co-operating with any subsequent SFO investigation.
The SFO has published a guide which sets out the circumstances in which the SFO may agree to a civil settlement, particularly in relation to allegations of overseas corruption.
UK Bribery Bill
The UK Government will announce on 18 November 2009 a timetable for bringing into force the Bribery Bill. The Bill is expected to come into force in April 2010.
The Bribery Bill is wider in scope than the US Foreign Corrupt Practices Act 1977. It will create new offences of giving and receiving bribes in the private and public sectors, both in the UK and overseas, and a new corporate offence of failing to prevent corruption.
Scottish Government Consultation
The Scottish Government is consulting on reforming the bribery laws of Scotland along the lines of the Bribery Bill which applies to England, Wales and Northern Ireland. The consultation closes on Friday 30 October 2009.
McGrigors has replied to the consultation and urged the Scottish Government:
- to ensure that the proposed new bribery laws for Scotland are consistent with the rest of the UK;
- to re-consider the negligence threshold for the proposed corporate offence of failing to prevent corruption. We have recommended that the threshold should be "gross negligence" for such a serious offence; and
- to take steps to reduce the risk of businesses being automatically and perpetually de-barred from public sector contracts throughout the EU following a conviction for failing to prevent corruption.
McGrigors' Anti-Corruption Services and Seminar Programme
Considering the importance of risk management and reduction in this arena, McGrigors has developed an anti-corruption risk assessment and a suite of procedures to help companies prevent corruption by employees, agents and even contractors wherever they are operating in the world.
McGrigors is also currently running a series of anti-corruption seminars throughout the UK. For further information please contact:
John Benstead
Partner, Business Crime & Commercial Fraud
Tel +44 (0) 207 054 2630
Email john.benstead@mcgrigors.com
Andrew Picken
Partner, Business Crime & Commercial Fraud
Tel +44 (0) 20 7054 2628
Email andrew.picken@mcgrigors.com
Tom Stocker
Partner, Business Crime & Commercial Fraud
Tel +44 (0) 131 777 7362
Email tom.stocker@mcgrigors.com
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