Approximately one year ago, the Serious Fraud Office (“SFO”), under its then incoming Director, David Green QC, withdrew a three-year-old policy on corporate self-reporting of overseas corruption.1 Although stating that no prosecutor “can ever give an unconditional guarantee that there will not be a prosecution,” the old policy nevertheless made it clear that, in cases in which the corporate clearly indicated an intention to co-operate, the SFO would “want to settle self referral cases … civilly wherever possible.”2 Green has indicated that the old policy was not in line with his conception of how the SFO should approach corporate offences, as it “contained an implied presumption that self-reported misconduct would be dealt with by civil settlement rather than prosecution.”3 In his view, “no prosecutor should appear to offer such a guarantee in advance.”4 And Green has been clear that the SFO should be just that, a prosecutor: “We are not a regulator, a dealmaker or a confessor.”5  

In two recent speeches, Green has addressed the role of corporate self reporting in the SFO’s enforcement regime.6 Against a background of corporate uncertainty over the benefits of self-reporting under the new policy, Green has sought to demonstrate that, even without the near-promise of a civil settlement, there are numerous benefits to self-reporting – and risks in failing to do so.

Benefits of Self-Reporting

In a speech on 24 October 2013, Green set out five reasons why corporates should self-report:

First, self-reporting “at the very least mitigates the chances of a corporate being prosecuted [and] opens up the possibility of civil recovery or a DPA [Deferred Prosecution Agreement].”

Second, “it is the right thing to do and it demonstrates that the corporate is serious about behaving ethically.”

Third, when a corporate does not selfreport wrongdoing, “the risk of discovery [by the SFO] is unquantifiable.”

Fourth, if a corporate does not selfreport wrongdoing that is later discovered, “the penalty paid … in terms of shareholder outrage, counterparty and competitor distrust, reputational damage, regulatory action and possible prosecution, is surely disproportionate.”

Fifth, burying information on wrongdoing “is likely to involve criminal offences related to money laundering under sections 327-9 of the Proceeds of Crime Act.”

In short: in considering how to deal with a corporate offender, the SFO will, other things being equal, treat one that has self-reported in a timely fashion more leniently than one that has not.

Public Interest Test

These factors must be considered in conjunction with the SFO’s current official guidance on corporate self-reporting,7 which casts the self-report as a factor, important but not determinative, in the prosecutor’s determination whether a prosecution would be in the public interest – i.e., the second limb of the so-called Full Code Test for whether a prosecution should be brought.8 Quoting the Guidance on Corporate Prosecutions, the new approach states that “for a self-report to be taken into consideration as a public interest factor tending against prosecution, it must form part of a ‘genuinely proactive approach adopted by the corporate management team when the offending is brought to their notice.’”9

In this context, Green’s position is that the SFO will approach purported “self reports” with a critical eye. In order to be a real factor in the SFO’s public interest consideration, the corporate needs to have made “a genuine selfreport.” Green defines a genuine self-report as one that “told us something we did not already know and did so in an open-handed, unspun way.” Then, if the corporate is “willing to cooperate in a full investigation and to take steps to prevent recurrence,” Green takes the view that “it is difficult to see that the public interest would require a prosecution of the corporate.”10

When to Self-Report

Green’s strong recommendation is to make “an initial report of suspected criminality … as soon as it is discovered,” which “protects the company against the SFO finding out by other means whilst the company investigates further.”11

The importance of self-reporting sooner rather than later is underlined by Green’s operating definition of a “genuine self-report” as something that provides the SFO with information it did not already have. With time, the chances of the SFO becoming aware of wrongdoing increase, with a corresponding decrease in the opportunity for the corporate to provide a “genuine self-report” and, consequently, the chance of affecting the SFO’s public interest calculation.


Corporates and their lawyers will have noticed that, notwithstanding Green’s view that the SFO should not rely on selfreporting as an evidence-gathering tool, the evidential test applicable to deferred prosecution agreements in the draft DPA Code of Practice allows for the SFO to do precisely that.12 Time will tell how the DPA will fit into the SFO’s enforcement armoury but it is clear that a “genuine self-report” will dramatically increase a corporate’s chances of being considered for one.

Green’s interventions certainly highlight many of the very real risks faced by a corporate that discovers wrongdoing within its organisation. The chances of being found out are significant and will increase with time: the SFO is further bolstering its Intelligence Unit and, as time passes, the chance that someone, somewhere decides to blow the whistle increases. In addition, the risk of collateral liability under money laundering legislation is an important consideration in cases in which a corporate continues to receive or hold the proceeds of a transaction potentially tainted by wrongdoing.

These speeches therefore contain valuable indications for corporates and their advisers when they analyse indications of corporate wrongdoing and weigh the pros and cons of engaging with the prosecutors and the scope of any such engagement. As such, they also serve further to underline the grave responsibility of corporate management and their advisers as they approach this always delicate task.