LONDON (Thomson Reuters Foundation) – After years of national and international pressure and amid much publicity, modern anti-bribery laws came into force in Britain in July 2011. More than two years later, not a single company has been charged under the UK Bribery Act.
The head of the Serious Fraud Office (SFO), however, says he will not be hurried into a prosecution and experts agree it will take time to bring a case to court.
“I am not apologetic about this (delay),” said SFO Director David Green.
“I think there are lessons from the past not to rush for glory with the wrong case. I am certainly not going to do that, but you can be confident that there will be Bribery Act prosecutions,” he told Thomson Reuters Foundation.
The Bribery Act makes it illegal to offer or receive bribes and, controversially, it names the failure of a company to prevent bribery as a specific offence.
When it became law, officials said it would bring Britain into line with other developed countries, end any suggestion the UK ignores these issues and help stem the corruption that campaigners say stops some poor states from developing.
While the UK is perceived to be relatively free of corporate bribery, British companies argued during discussions on the law that a bribe is a normal part of doing business in some countries and that it would be wrong to punish an entire company for the actions of one rogue employee.
The act had been due to come into force in early 2011 but was delayed in part by frantic corporate lobbying.
WHAT’S TAKING SO LONG?
The absence of corporate prosecutions to date has prompted some observers to question whether the law is being applied effectively but Green said delays are to be expected.
The Bribery Act is not retrospective – a bribe must have taken place after July 2011 to fall under the law – and major bribery probes carried out by the SFO are extremely time-consuming, Green noted on Friday.
“These investigations are, in their nature, huge and it can take a very long time to get material from the corporate,” Green said.
“They will quite often, for instance, say that documents are legally privileged ... and it takes a long time to get information from them. It then has to be evaluated here – often vast amounts of digital information,” he added.
Lawyers agreed that corporate bribery cases were highly complex and that delays were inevitable.
“The reality is we simply have to wait and see whether he (David Green) actually delivers on what he has been saying for the last 18 months,” Patrick Rappo, a partner at the law firm Steptoe & Johnson and former joint head of bribery and corruption at the SFO, told Thomson Reuters Foundation.
“The Bribery Act itself is far from toothless, but its bite will only be felt when the SFO has had sufficient time to investigate and commence prosecutions,” he added.
The U.S. Foreign Corrupt Practices Act (FCPA), to which Britain’s Bribery Act is often compared, was passed in 1977 but there were very few prosecutions under the act until the late 1990s. The U.S. is now the biggest enforcer of anti-corruption legislation worldwide.
Three individuals, in three separate and relatively minor bribery cases, have been convicted under the Bribery Act by the UK’s Crown Prosecution Service. A further three individuals, this time prosecuted by the SFO, are on trial. However, no corporations have been charged.
Green said in early September at a conference on economic crime that the SFO was investigating 68 cases, of which eight involved the Bribery Act. The director declined to be drawn on whether those statistics had changed since his speech.
The SFO has come under a number of different pressures in the last three years including significant budget cuts, talk of a possible merger into a larger National Crime Agency, high staff turnover, a new director, a scandal relating to unauthorised severance payments signed-off by the former director and a bungled investigation into the business affairs of two property tycoons, also under the former director.
Additionally, in July 2012, the SFO took on the enormous task of investigating the perpetrators of the Libor interest rate-rigging scandal, in which traders colluded to manipulate the benchmark London interbank offered rate by tiny amounts that translated into huge profits.
Any or all of those issues may have contributed to a lack of corporate Bribery Act prosecutions.
However, the issue that most concerns Robert Barrington, head of anti-graft watchdog Transparency International UK, is the SFO’s reduced budget.
“The fact that the SFO’s budget has been so substantially cut at the same time as the Bribery Act has come in, really does raise questions about the government’s commitment to prosecutions,” Barrington said.
“If the resources aren’t put into it, then of course there will never be substantial prosecutions, certainly not in the numbers that are probably merited,” he added.
Green, however, said budget cuts would not stop the SFO from doing its job.
“Can I eliminate budget reasons as a hindrance to Bribery Act prosecutions? I have said, and I mean it, on my watch, the SFO will never refuse to take on a case on grounds of cost,” Green said.
TIME TO RELAX?
Since there have been no corporate prosecutions, Barrington said he thought some companies had stopped focusing so intently on the Bribery Act and their compliance programmes may have become stale but experts warned that it would be a mistake for companies to believe they could still get away with paying bribes.
“Most companies realise that at some stage there will be a (corporate Bribery Act) prosecution. It is simply a matter of time,” Robert Amaee, a partner at the law firm Covington & Burling and a former head of anti-corruption at the SFO told Thomson Reuters Foundation.
“The type of companies we deal with are concerned with their global exposure. Even in the absence of a corporate Bribery Act prosecution, they are fully aware that they still have potential exposure under other anti-bribery laws, either in the country which they’re doing business, their country of incorporation or perhaps, if they have U.S. connections, the U.S. Foreign Corrupt Practices Act,” Amaee added.
While not all countries enforce their anti-bribery legislation equally, the Organisation for Economic Cooperation and Development (OECD) is pushing hard for its members to do more and that pressure will only increase, Nick Benwell, a partner at the law firm Simmons & Simmons and co-chair of the International Bar Association’s anti-corruption committee told Thomson Reuters Foundation.
“I think the assumption that any delay in bringing forward large prosecutions in the UK means we are going backwards in our fight against corruption would be misconceived,” Benwell said.