Some items on our site have recently moved. Visit our News Hub for selected articles, special reports, podcasts and other resources.
UK companies could get bigger corruption self-reporting discounts, former SFO head says
02 Sep 2019 12:00 am by Martin Coyle
Companies could be offered fine discounts of up to 75 percent to incentivize them to self-report corruption issues, the former head of the UK’s Serious Fraud Office said.
David Green, who stepped down as SFO head in April last year after six years at the helm, today defended the UK’s deferred prosecution agreement regime, which encourages companies to cooperate with the SFO to avoid criminal prosecutions.
Since Green’s departure, DPAs have come under the spotlight because of the SFO’s inability to take action against individuals linked to companies that have struck agreements with the prosecutor.
Engine maker Rolls-Royce paid 497 million pounds to settle global corruption charges in 2017 ($605 million today), but the SFO dropped its cases against unnamed individuals in February.
Similarly, supermarket chain Tesco paid 129 million pounds in April 2017 to settle accounting-fraud charges. Three former senior Tesco executives were later cleared of fraud last year after a UK judge ruled they had no case to answer.
Despite the apparent inconsistency in outcomes, Green insisted that DPAs had a future and worked. The procedure allows companies to “draw a line” under issues and move on, he told an event* in Cambridge today.
As well as cooperating with the SFO, the DPA regime encourages companies to self-report issues of wrongdoing. Companies can be offered a discount of as much as 50 percent on any fine they might have received by approaching the SFO with evidence of wrongdoing.
The current reduction is roughly the same as what a company could expect if it offered an early guilty plea to an offense in court.
“Companies need to be further incentivized; this could see reductions of 66 percent to 75 percent,” Green said.
Green also called for the SFO to be given greater help in its fight against errant companies. Companies could be held more to account by making them responsible if they fail to prevent economic crime, similar to an offense under the UK’s Bribery Act.
The government has been exploring possible changes to UK legislation in this area, but the review has been stalled for some two years.
“Hopefully it might just happen after the Brexit dust has settled,” Green said.
In August, the SFO set out guidance for companies looking to co-operate. The document is seen as a pathway for companies seeking DPAs.
* “The Cambridge International Symposium on Economic Crime,” Cambridge, Sept. 1-6, 2019
'Make no mistake': Offshore crypto exchanges with US customers coming under Washington's magnifying glass11 Aug 2021 10:03 pm by Neil RolandBitMEX is likely just the first overseas cryptocurrency exchange with US customers that will get whacked by American regulators
16 Jul 2021 1:59 pm by Jack SchicklerThe EU banking watchdog's handling of probes into money laundering at Danske Bank and Pilatus Bank.