On 24 December 2020, the UK and the EU reached a new Trade and Cooperation Agreement. The deal, which came into force on 1 January 2021, has important implications for white collar crime enforcement across Europe, and in particular for the UK Serious Fraud Office (SFO).
Quite how the deal will impact on the UK as an international financial services hub remains an open question. Announcing the deal, Prime Minister Boris Johnson recognised that the deal "perhaps does not go as far as we would like" in terms of access to EU markets for UK financial services. If Brexit were to cause the UK's status as a global financial centre to be diminished in any way, the SFO's status as a leading international enforcement agency is likely to reflect that.
The issue is likely to be compounded by the loss of access to the EU's enforcement tool kit. While enforcement agencies on both sides of the negotiations have consistently signalled their intentions to continue to support one another in investigating and prosecuting economic crime, cooperation is likely to be hampered in important ways.
Coordinating policing and prosecutorial strategies
The UK is no longer a member of Europol and Eurojust, the EU's cross-border policing and prosecution agencies, which serve as centres for coordinating law enforcement co-operation and criminal intelligence sharing. This means the UK will no longer participate in the management of the agencies' activities and has lost access to their information exchange databases. As things stand, future cooperation between the UK and these agencies will be limited to the reciprocal secondment of liaison officers and prosecutors.
The UK can no longer issue European Investigation Orders (EIOs) to EU Member States, and vice versa. EIOs are requests for investigative assistance from one country to another that impose legal obligations on the recipient country for the timely gathering and transfer of evidence across borders. The UK will now have to request assistance under mutual legal assistance treaties and a 1959 Council of Europe Convention, which will likely mean longer waiting periods for investigating agencies such as the SFO. EIOs issued before 31 December 2020 will continue to be recognised.
Locating persons and items of interest
The UK can no longer access or feed into the Second Schengen Information System (SIS II). This is Europe's largest and most widely used information sharing system for security and border management in Europe. SIS II provides 'real time' alerts on wanted or missing persons, vehicles and other items. Going forward, the UK must rely on Interpol's alert system and databases. However, Interpol's systems lack the level of automation and detail of SIS II and not all EU Member States consistently provide them with relevant alerts.
The system of European Arrest Warrants no longer applies in the UK. This system significantly expedited the extradition process between EU Member States when it was introduced. The new surrender agreement reached has some notable limitations: EU Member States can refuse to extradite their nationals and a requirement of dual criminality (where the relevant offence must be criminal in both countries) can apply. Extradition is widely expected to be a more protracted process between the UK and EU Member States going forward, and may well be subject to an increase in legal challenges.
Room for continued cooperation
Clearly, the SFO is facing an array of new challenges to cooperative international investigations and prosecutions. However, the Brexit deal provides for cooperation in some significant areas. The deal provides for the continued sharing of DNA and fingerprint data through the Prüm Network, as well as the continued transfer of airline passenger name records. Whilst data sharing is going to be less seamless than it was previously and 'real time' alerts will not be available through EU databases, both sides have agreed to continue sharing information relevant to criminal investigations. Notably, the UK has enacted the 'Law Enforcement Directive' (2016/680) as Part 3 of the Data Protection Act 2018, meaning that there are equivalent regimes in the EU and the UK in relation to the processing of personal data for the purposes of investigating and prosecuting crime. This should, to some extent, alleviate data protection concerns in relation to data sharing. Even more significantly, the deal expressly provides for UK and EU agencies to continue to set up Joint Investigation Teams. It was a Joint Investigation Team made up of the SFO, France's Parquet National Financier and the US Department of Justice that secured Airbus' record-setting €3.6 billion global bribery settlement in early 2020.
The outlook going forward
How all this will play out in practice remains to be seen. If as a consequence of the Brexit deal London were to become a less important financial services hub as compared to other European capitals, we can expect that the UK may no longer be the focal point of investigative action that it has been up until now. This has clear implications for the SFO as an international prosecutor. Whether or not that proves to be the case, it may be that continued enforcement cooperation will lead to future arrangements for more seamless coordination of investigations between the UK and EU Member States. On the other hand, if new obstacles prove particularly onerous, UK and EU investigations may become increasingly detached, which would likely serve to depreciate the SFO's reputation as a flagship global enforcement agency.
Whatever the outcome, now more than ever it is essential for companies to rely on legal counsel with expertise in investigations and white collar enforcement across Europe's major enforcement jurisdictions. With leading investigations lawyers across the EU and the UK, Hogan Lovells continues to advise clients from all over the world and across all industry sectors on complex enforcement matters.