On 9 October 2012, the Serious Fraud Office (“SFO”) published updated guidance on the UK Bribery Act 2010 (“Bribery Act”) specifically concerning self-reporting, facilitation payments and business expenditure. This guidance has been widely reported as signifying a change of direction for the SFO and a tougher stance as a result of the appointment of David Green QC as its new Director.

We consider that this updated guidance does not constitute a major shift in approach by the SFO. It has simply better aligned its own guidance with existing prosecution guidance already in the public domain. The SFO is a prosecutorial body which should prosecute cases that pass the evidential test and are in the public interest.


The key changes in the new guidance revolve around self-reporting. Previously, a company could “self-report” an instance of bribery to the SFO. The SFO had issued detailed self-reporting guidance (Approach of the Serious Fraud Office To Dealing With Overseas Corruption) in July 2009 which outlined that a company may be treated more leniently if it self-reported to the SFO. However, the fact that the 2009 guidance is no longer in force does not automatically lead to the conclusion that self-reporting will cease to be a relevant factor in a prosecutor’s decision whether to institute criminal proceedings.

The SFO’s updated guidance states that self-reporting will not be seen by the authorities as an automatic entitlement by a company to avoid a criminal prosecution.  Instead, it may constitute a relevant consideration against a criminal prosecution, to the extent that it can be construed as a public interest factor on the basis that it forms a “genuinely proactive approach adopted by the corporate management team when the offending is brought to the [notice of the SFO]”.

This new approach does not differ materially from the SFO’s previous guidance which stated that the benefit to a company of self-reporting would be the “prospect (in appropriate cases) of a civil rather than a criminal outcome.”

The updated 2012 guidance does not re-iterate the promise of the opportunity for a company to manage the issues of its self-reporting and any publicity surrounding that on a pro-active basis with the SFO. However, we do not envisage that there would be any practical changes in this regard.

The SFO has stated that the revisions to the self-reporting guidance have been made to:

  1. “restate the SFO's primary role as an investigator and prosecutor of serious and/or complex fraud, including corruption;
  2. ensure there is consistency with the approach of other prosecuting bodies; and
  3. take forward certain OECD recommendations.”

Facilitation payments

Facilitation payments are generally low level payments to government officials to expedite a process that a person is already entitled to. Facilitation payments are illegal under the Bribery Act.

In June 2012, the SFO approved a six step process for assessing conduct by companies in relation to facilitation payments. Those six steps were:

  1. whether the company had issued a clear policy on facilitation payments;
  2. whether the company’s employees had access to written guidance on the procedure they should follow if they were asked to make a facilitation payment;
  3. whether the employees were following the procedures;
  4. if there was evidence that the company was recording all facilitation payments;
  5. if there was evidence that the company was taking a proper action (collective or otherwise) to tell the appropriate authorities in the countries concerned that facilitation payments were being demanded; and
  6. whether the company was taking practical steps to curtail facilitation payments.

The SFO had also previously said that facilitation payments were endemic in some countries and so would take time to eradicate. However, the SFO now appears to have moved away from this line and the six step approach in its new guidance. The SFO has now simply said: “A facilitation payment is a type of bribe and should be seen as such.”

The SFO has also re-iterated its view that any decision to prosecute will be taken in accordance with current prosecution guidance (such as the Joint Prosecution Guidance of the Director of the SFO and the Director of Public Prosecutions, the Code for Crown Prosecutors and the Guidance on Corporate Prosecutions) applying the public interest principle. We consider that the six steps may still be pleaded in mitigation but only the courts will be able to decide whether to accept such arguments.

Business expenditure

In its new guidance, the SFO has made clear that bona fide hospitality or promotional or other legitimate business expenditure would not fall foul of the Bribery Act. Where such conduct amounts to an attempt to disguise a bribe as legitimate business expenditure, a decision whether to prosecute will be taken following consideration of the public interest factor. The SFO now says that "if on the evidence there is a realistic prospect of conviction" and if "it is in the public interest to do so" then it would prosecute.

Impact of the new guidance

Going forward, we consider that companies should still be taking a risk-based approach to their anti-bribery compliance programmes and provided they adequately address the risk of bribery, the new guidance should not have any major impact.

Although, the SFO says that in relation to companies that have already acted on the old guidance each case “will be reviewed and assessed according to its own circumstances. If there has been reliance on a previous statement of policy or practice the SFO will consider such reliance in the context of the Full Code Test” in the Code for Crown Prosecutors.