SFO - Serious Fraud Office

Questions and answers

The Serious Fraud Office has reviewed its policy on facilitation payments, business expenditure and corporate self-reporting.

 

Why are revisions being published?

Following his appointment, the Director of the SFO decided to review SFO policies and take forward recommendations made by the OECD Working Group on Bribery. The revisions have been published to:

  1. restate the SFO's primary role as an investigator and prosecutor of serious and/or complex fraud, including corruption;
  2. ensure there is consistency with the approach of other prosecuting bodies; and
  3. take forward certain OECD recommendations.

The SFO's primary role is to investigate and prosecute. The revised policies make it clear that there will be no presumption in favour of civil settlements in any circumstances.

 

 

Is this a shift in the SFO's position?

The new approach restates the SFO's primary purpose.

Around the time when the Bribery Act 2010 came into force, joint guidance was issued by the Director of Public Prosecutions and the Director of the SFO, and separate guidance was published by the Ministry of Justice. Save for one change, that guidance continues to apply. The only change is that the reference in the joint prosecution guidance to the SFO's former policy on self-reporting has been removed.

Any decision to prosecute unlawful activity will be governed by the Full Code Test in the Code for Crown Prosecutors and the applicable joint prosecution guidance.

 

What about companies that have already acted on the old guidance?

Each case will be reviewed and assessed according to its own circumstances. If there has been reliance on a previous statement of policy or practice the SFO will consider such reliance in the context of the Full Code Test. If before the publication of the revised policy statements the SFO entered into an agreement with a corporate body based on an earlier SFO statement of policy or practice, and the corporate body has fully complied with the terms of that agreement, then the previous statement of policy or practice will continue to apply.

 

Is there now no flexibility in relation to facilitation payments?

It would be wrong to say there is no flexibility. Facilitation payments were illegal before the Bribery Act 2010 came into force and they remain illegal under the Act. Whether or not the SFO prosecutes in relation to facilitation payments will always depend on (a) whether it is a serious or complex case which falls within the SFO's remit and, if so, (b) whether the SFO concludes, applying the Full Code Test in the Code for Crown Prosecutors, that there is an offender that should be prosecuted.

If the requirements of the Full Code Test are not established, the SFO may consider civil recovery as an alternative to a prosecution.


 

Should companies now be more nervous about corporate hospitality?

No. The new statement of policy expressly reaffirms the important point that bona fide hospitality or promotional or other legitimate business expenditure is recognised as an established and important part of doing business.

The SFO will prosecute offenders who disguise bribes as business expenditure (hospitality and the like), but only if (a) the case is a serious or complex one that falls within the SFO's remit and (b) the SFO concludes, applying the Full Code Test, that there is an alleged offender that should be prosecuted.

If the requirements of the Full Code Test are not established, the SFO may consider civil recovery as an alternative to a prosecution.

 

Why is there a revised approach to self-reporting?

As explained above, the revisions have been made to:

  1. restate the SFO's primary role as an investigator and prosecutor of serious and/or complex fraud, including corruption;
  2. ensure there is consistency with the approach of other prosecuting bodies; and
  3. take forward certain OECD recommendations.

The revised statement of policy explains in clear terms that that any decision to prosecute unlawful activity will be governed by the Full Code Test in the Code for Crown Prosecutors and the applicable joint prosecution guidance.

The revised statement of policy is not limited to allegations involving overseas bribery and corruption.

If the requirements of the Full Code Test are not established, the SFO may consider civil recovery as an alternative to a prosecution.

 

Will the SFO communicate with corporate bodies about their past or future conduct?

The SFO encourages corporate self-reporting, and will always listen to what a corporate body has to say about its past conduct; but the SFO offers no guarantee that a prosecution will not follow any such report.

The SFO is primarily an investigator and prosecutor of serious and/or complex fraud, including corruption. It is not the role of the SFO to provide corporate bodies with advice on their future conduct.