In what some are referring to as a "wake-up call" for UK businesses doing business overseas, the UK's Financial Services Authority ("FSA") announced on January 8, 2009 that it fined Aon Ltd. £5.25 million (approximately $8 million) for failing to take reasonable care in establishing and maintaining an effective system of controls to counter the risks of bribery and corruption. The FSA alleged that from January 2005 to September 2007 Aon Ltd. failed to properly assess and prevent illegal payments from being made to foreign firms and officials who helped the company obtain business overseas. As a result of this failure, Aon's employees made approximately $7 million in suspicious payments.

"This is the largest financial crime-related fine imposed by the FSA to date," noted Margaret Cole, Director of Enforcement at the FSA. "It sends a clear message to the UK financial services industry that it is completely unacceptable for firms to conduct business overseas without having in place appropriate anti-bribery and corruption systems and controls." This apparent about-face in enforcement efforts comes on the heels of international criticism of the UK government for its failure to enforce its anti-corruption laws, including its controversial abandonment of the BAE investigation. Since then, the UK government has actively tried to address the problem by appointing a new anti-corruption czar and increasing the number of Serious Frauds Office ("SFO") investigators by 50 percent.

Due to its cooperation with the FSA, Aon Ltd. qualified for a 30 percent reduction in its fines under the FSA's settlement discount scheme. Without the discount, the FSA would have imposed a £7.5 million penalty. The FSA has recently stressed the importance of deterring UK companies from participating in corrupt practices overseas, and the FSA believes that Aon Ltd.'s penalty reflects this objective. In a September 2007 quarterly report, Aon Corp. disclosed that it had self-reported an internal investigation of possible violations of the FCPA to the DOJ, SEC, and other non-US regulators, and had agreed to toll any applicable statute of limitations. The US investigation is pending.

Follow these links for additional information:

  • The UK's Financial Services Authority press release can be found here
  • The UK's Financial Services Authority's Final Notice can be found here
  • Aon Corporation's September 2007 10-Q Report can be found here