On 9 October 2012, the Serious Fraud Office (SFO) issued revised guidance on the prosecution of the Bribery Act, in relation to facilitation payments, business expenditure and corporate self-reporting. The perception is that the revisions are intended to signal a tougher approach by the SFO.
Facilitation payments and corporate hospitality
In relation to facilitation payments and corporate hospitality, the SFO's position remains the same as before this new Guidance was issued. Facilitation payments are typically small bribes paid to ensure that an official performs an existing duty. They were illegal both before and after the introduction of the Bribery Act 2010.
The SFO's new statement of policy on corporate hospitality reiterates its previous position that bona fide hospitality or promotional or other legitimate business expenditure will not be punished. Bribes disguised as corporate hospitality will be prosecuted if it is in the public interest. Reasonable, proportionate expenditure and made in good faith should raise no concern. Usually the ambit of what is reasonable is a matter of common sense.
The significant shift in the Revised Guidance is the SFO's attitude to self-reporting. Previously it had been thought that prosecution was unlikely to follow self-reporting, unless board members had approved or deliberately ignored corruption. However, the SFO will no longer guarantee that prosecution will not follow self-reporting. All decisions to prosecutions will now be based on published guidance including the "Guidance on Corporate Prosecutions".
Here, "a genuinely proactive approach adopted by the corporate management team when the offending is brought to their notice, involving self-reporting and remedial actions, including the compensation of victims" is one factor that will be taken into account when deciding whether to undertake a prosecution. However, it will be weighed with other factors such as whether the company has a history of similar conduct, whether the conduct was part of the established business practices of the company or an isolated action; and the existence or otherwise of a corporate compliance programme.
There is an enhanced risk that self-reporting could now lead to a prosecution, whereas before the new Guidance there was an expectation that the matter could be settled on a civil basis with no acceptance of guilt. However, a failure to self-report is a factor that would increase the possibility of a prosecution.
The revised guidance appears to take into account criticism of the SFO's approach to settling corruption investigations. It may also reflect a renewed vigour within the SFO to prosecute corruption, rather than settlement.