The Scottish Civil Recovery Unit is to recover £5.6 million under Proceeds of Crime legislation after a Scottish drilling company, Abbot Group Limited (“Abbot”), admitted it had benefited from corrupt payments made in connection with a contract entered into by one of its overseas subsidiaries and an overseas oil and gas company.
The contract was entered into in 2006 and the payments were made in 2007. The £5.6 million to be paid by Abbot represents the profit made by the company under the contract, and is to be paid in three stages by 31 March 2015. Since the corrupt payments were made, the ownership and structure of Abbot has changed significantly.
The corrupt payments had been brought to light in May 2011, following enquiries by an overseas tax authority. Abbot subsequently employed a firm of solicitors and accountants to investigate, and reported the results of the investigation to the Crown Office and Procurator Fiscal Service (the “Crown”) in July 2012 under the Scottish self-reporting initiative (which runs to June 2013).
The Scottish self-reporting initiative had been approved and introduced by the Crown to mark the commencement of the Bribery Act 2010 (the “Act”). Under the initiative the Crown will accept reports from businesses (meaning bodies corporate or partnerships as referred to in Section 14(1) of the Bribery Act) who wish to report the discovery by them of conduct within their organisation which may amount to an offence under the Act, with a view to consideration being given by the Crown to refraining from prosecuting the business and referring the case to the Civil Recovery Unit (“CRU”) for civil settlement.
Further information on the Scottish self-reporting initiative and guidance on the approach of the Crown to reporting by businesses of bribery offences, is contained at http://www.copfs.gov.uk/Publications/2012/11/Guidance-Approach-Crown-Office-and-Procurator-Service-Reporting-Businesses-Bribery-Offences.
Following a self-report by Abbot to the Crown, the case was referred to the Scottish Civil Recovery Unit with a view to a civil settlement being agreed.
Following the outcome of the case, Ruaraidh Macniven, Head of the Civil Recovery Unit said, “Self-reporting is an important way to ensure that corruption is exposed and that companies put in place effective systems to prevent it”.
The Abbot settlement is the first reported outcome of the Scottish self-reporting initiative (introduced on the 1 June 2011), and legal commentators have suggested that the case represents another encouraging example of a business taking corruption prevention seriously.
It is interesting that the self-reporting friendly approach in Scotland, which is of course a separate jurisdiction, now no longer exists in England and Wales; the Government is instead proceeding with its plans to introduce deferred prosecution agreements (discussed in my article of 17 January 2013).