Following the introduction of The UK Bribery Act 2010 last week, (please see our previous e-update for details), the Lord Advocate Frank Mulholland QC has approved an initiative for businesses to "self-report" any activity that may constitute bribery to the Crown Office's Serious and Organised Crime Division (SOCD).
Through the initiative, conduct that may fall within the scope of the Act will be investigated and the SOCD will decide what action should be taken, with regards to the public interest. The initiative gives the SOCD power to refer less serious matters to the Civil Recovery Unit (CRU) for civil settlement, meaning that businesses may be able to evade criminal liability.
According to the Lord Advocate, it is hoped that the initiative will "encourage businesses to proactively report wrongdoing" and it will give businesses an opportunity to address the weaker areas of the business that are giving way to corrupt activity, protecting the business reputation as a result. The Lord Advocate noted that this is "not a soft option and is about finding the right solutions to this type of offending".
The Crown Office initiative is distinct from the Serious Fraud Office (SFO) self-reporting scheme in existence in England and Wales, however, the SOCD and SFO will liaise on any reported cases with cross-border elements.
The initiative will run for a 12 month period only, therefore, any business wishing to submit a report must do so by 30 June 2012. Reports must be made to the SOCD via a solicitor, and there are a number of requirements to be satisfied before the report can be accepted. The business must:
- show that thorough investigations have been carried out
- disclose reports to the SOCD as well as the full extent of the criminal conduct discovered
- provide details of steps taken to prevent any reoccurrence of such conduct
- be committed to 'meaningful dialogue' with the Crown in the assessment of the case.
The SOCD may engage in early discussions with the solicitor submitting the report on behalf of the business as to the likelihood of the report being accepted and it may advise that the case be referred "to a regulator rather than to the Crown".
In the SOCD's assessment, the following criteria will be taken into consideration:
- the nature, seriousness and extent of the conduct and harm caused
- the anti-bribery systems in place at the time of the wrongdoing
- whether the wrongdoing was authorised or connived in by senior management or restricted to a small number of individuals
- whether the business has a previous record for such conduct
- whether the wrongdoers are still employees of the business
- whether the business has fully disclosed the extent of the unlawful conduct
- any particular considerations that weigh against prosecution.
An initial evaluation of the report will be made within 8 weeks, during which time the SOCD may seek advice from law enforcement agencies about the information that has been disclosed. At this stage the SOCD will consider whether or not it is appropriate to prosecute. If the case is of a serious nature the business may still face prosecution, however, under the initiative cases of a less serious nature may be referred to the CRU for civil settlement. Cases will only be referred to the CRU if the SOCD are satisfied that there is no good reason for criminal investigation.
The initiative reflects the Crown's commitment to fighting bribery within corporate organisations and any businesses concerned that bribery may have taken place are encouraged, after taking specialist legal advice, to self-report the matter without delay.
For access to the Crown Office guidance on the self-reporting initiative, please click here.