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Understanding Multi-Agency and Jurisdictional Investigations: A Comprehensive Guide

Author: Azizur Rahman  10 July 2014
3 min read

In 2014 there was the suggestion that, people convicted of commercial crimes overseas could be banned from running UK firms. It was a stark reminder of joined-up thinking by enforcement agencies worldwide….and emphasises the need for compliance.

Business secretary Vince Cable stated that anyone convicted of a business crime anywhere in the world should be barred from running companies in the UK.

It would have been a big step to take and a fairly elaborate one to enforce. In the UK, anyone convicted of commercial offences such as stealing company funds or fraudulent trading are likely to be disqualified from any directorships they hold and prevented from taking any new ones. They can be jailed for up to two years if they breach any such disqualification. About 1,200 directors are disqualified in the UK each year, for periods ranging from two to 15 years.

Mr Cable’s call for a tougher approach on business crime is now consigned to history. But there is no doubt that taking such a stance now rather than 20 - or even ten - years ago makes perfect sense. Globalisation of business, huge advances in telecommunications and the ability and eagerness of the major nations’ anti-crime agencies to work together mean that there is the ability and the will to enforce such measures. And as a result, companies and their directors have to be surer than ever before that they, their staff and other representatives are acting within the law here and abroad – everywhere, in fact. If they are not then they are more likely than ever to be found out, prosecuted, convicted and barred from running a company. Anywhere.

Ensuring you are Legally Compliant

Those who want to avoid such an outcome have to adhere to the law wherever they do business. It’s an obvious thing to say but it may not be as dumb as it sounds. That is because it is one thing to make sure you are adhering to the law at any given time. But how do you make sure that is always the case? How do you make sure that all your staff, agents and representatives “in the field’’ are acting legally at all times? It is a conundrum that has no short cut. Company directors have to make sure they have strong, appropriate compliance procedures in place – procedures that have been initiated after a thorough, top-down (and, if need, be worldwide) analysis of the company, its staff, customers and other third parties it has dealings with. These procedures must be fully documented, enforced, regularly reviewed and, if necessary, altered to make sure they are equal to any developing issues or challenges. This may sound like a lot of hard work for those running a company. But if the business secretary has his way the alternative for those who don’t put in the effort could well be an international ban on them running a company.

Faced with such an option, any director has to make sure his or her personal financial affairs are in order to remove the risk of being barred from being a director. And, as outlined above, they have to ensure their company is also toeing the legal line all over the world.

Having regularly advised on compliance, we know companies face plenty of demands on their times and have many responsibilities. It is understandable that they may find it difficult to divert their precious energy, time and money towards compliance when it could all be being used to bolster the company’s prospects at home or abroad. But what could be more damaging to a company’s prospects than it being convicted of wrongdoing here or abroad or having its directors banned from running any company anywhere?

It is only when such a possibility is considered that the importance of compliance can be appreciated. Just ask anyone who has been barred from being a director in the UK because of their company’s wrongdoing whether they now feel compliance is a waste of time, effort and money. The answer will be a firm “No’’.

In recent years, the Bribery Act has made companies responsible for anything that goes on in their name anywhere in the world, the Fraud Act has extended the potential to bring fraudulent trading prosecutions to sole traders, trusts and partnerships and the Enterprise Act has been used to come down hard on anything regarded as anti-competitive measures. The implications for directors are huge. Added to this, the greatly increased “joined up’’ investigating going on between organisations such as the police, the Serious Fraud Office (SFO), HMRC and Financial Conduct Authority (FCA) and their foreign counterparts means that scrutiny of national and international business is arguably at its most efficient ever.

Some may say that with the right legal advice any problems that arise can be made to disappear. Not so. If a company uncovers wrongdoing it should certainly consult with lawyers. They can then analyse the potential for leniency for cooperating with any pending investigation and the possibility of brokering a plea-bargaining deal. But we appear to be in the midst of a crackdown. And in such circumstances, it is far better to go to the effort of preventing problems rather than waiting until it is too late and then hoping you can make them miraculously go away.

The people who run companies are far better placed and equipped to make sure their firms are run legally than they are to deal with those who may convict them. With the possibility of punishments having an added international dimension, there can be no stronger argument for making sure a company is totally, legally safe.

Azizur Rahman C 09369

Azizur Rahman

Senior Partner

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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.

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