Author: Azizur Rahman
29 November 2016
3 min read
The authorities are looking very closely at allegations that Rolls-Royce used teams of agents to help it land contracts in a dozen or more countries. Not for the first time, we have a major company having to explain the methods it used to secure business.
Failure to prevent bribery is costly. Many companies have had to pay colossal financial penalties in recent years for doing just that.
Under Section 7 of the UK’s Bribery Act 2010, it is an offence to fail to prevent a person associated with your company from committing bribery on its behalf.
Obviously, bribery prosecutions have been brought – and continue to be brought – under other Acts for actions that pre-date the introduction of the Bribery Act. But the Act’s creation of an offence of failing to prevent bribery places a major obligation on companies. Failure to meet that obligation can prove hugely damaging. Unlimited fines, up to ten years in prison and confiscation of assets can all follow a conviction.
The Act differs from previous legislation in that it can punish the bribery and the failure to have prevented that bribery.
If you are a company or individual faced with bribery allegations or you feel that you may, in the future, be asked about activities that could be interpreted as bribery then you need to seek legal representation immediately.
The Bribery Act came into effect on 1 July 2011 and is used to prosecute any bribery committed from that day onwards. Anyone who suspects they may be involved in current or historic bribery must not ignore the possibility that they could face prosecution.
Bribery and the failure to prevent it are high on the authorities’ agenda, meaning that the Act is likely to form the basis of many investigations in coming years.
The first thing a company needs to do if it suspects bribery is to investigate. It is likely that only solicitors with expertise in the field of bribery will be able to conduct such an investigation effectively. They will know how to follow the evidence trail to determine whether bribery has been committed and by whom. They will also be able to judge from the evidence available whether there is a chance of a successful prosecution.
Such an informed approach is not only important in terms of assessing any likely criminal liability for bribery. It is also vital in deciding how to proceed. When it comes to the offence of failing to prevent bribery, a company has a defence if it can show it had in place adequate procedures designed to stop bribery being carried out on its behalf.
An investigation can not only help examine whether bribery was committed. It can also analyse the procedures that a company has in place to combat bribery – if there were any. How robust were these procedures? Were they regularly maintained and reviewed? If so, who was responsible for them? If such procedures were in operation, how did they fail to prevent bribery?
Such questions are best asked and answered by a solicitor with expertise in this area of law. They will know how the authorities would react to the answers that are given and what the likelihood would be of a prosecution and conviction for failure to prevent bribery. From this information, they can determine the best approach to be taken by their client.
A company that conducts such an internal investigation can self-report the problems that they have uncovered. By doing this and then cooperating with the authorities, it is also possible that they will be treated more leniently. If it took a favourable view of the company’s efforts, the Serious Fraud Office (SFO) could offer it a deferred prosecution agreement (DPA) whereby a prosecution is suspended on the condition that the company agrees to meet a number terms, such as fines, compensation orders or improvements to working practices.
But such treatment is only likely if the company can point to efforts it has made to combat bribery. If the failure to prevent bribery is due to the company doing little or nothing, it will have little defence to the allegations. If it has in place a disciplinary system alongside its anti-bribery procedures it could argue that it had done all it could to prevent wrongdoing. This is a delicate area where informed legal advice and careful handling is necessary.
Putting it bluntly, any company that self-reports has to be able to show that it had taken steps to prevent the bribery happening. There is little value in reporting to the authorities that you have been involved in bribery if you cannot point to anything that you did to prevent or tackle the problem.
Such anti-bribery procedures must be devised with the help of a legal expert. Only then are they likely to be both fit for purpose and capable of convincing the authorities that you did all you could to prevent bribery in your organisation.
The alternative, if prosecuted under the Bribery Act, is a very heavy punishment for what can prove to be a very costly failure.
Aziz Rahman is Senior Partner at Rahman Ravelli and its founder. His ability to coordinate national, international and multi-agency defences has led to success in some of the most significant corporate crime cases of this century and top rankings in international legal guides. He is recognised worldwide as one of the most capable legal experts regarding top-level, high-value commercial and financial disputes.