International and inter-agency co-operation

More agencies are working together across the globe to combat economic crime, but it is not all harmonious.

Most significant corporate offending involves cross-border transactions and the success or otherwise of investigations and prosecutions often depends upon the extent of co-operation between authorities in different jurisdictions. The US Department of Justice has shown its ability to work closely with prosecutors of other jurisdictions in many major cases, including with German authorities in the huge Siemens corruption settlement in 2008 and, more recently, with Mexican, Panamanian and Greek prosecutors.

In the UK, the Serious Fraud Office has long touted its close relationship with the US DOJ and the SEC. Co-ordinated settlements in cases such as Innospec and the BAE Systems Al Yamamah investigation have demonstrated that relationship in action, while behind the scenes information is exchanged between the UK and US regulators and prosecutors. Where there is overlapping jurisdiction, the UK and US authorities will discuss which is better placed to lead and the SFO has been known to step aside on the basis that an investigation by US authorities was already underway.

Cooperation between the SFO and agencies from other nations appears to be increasing as well. It was notable that, following the SFO’s first successful conviction of a company for corruption offences following a contested trial, the prosecutor’s December 2014 press release made a point of thanking authorities in Kenya, Ghana and Switzerland for their assistance. Similarly, the conviction in March 2015 of David Gerald Dixon, the perpetrator of the Arboretum Sports gambling syndicate Ponzi scheme, followed ground breaking co-operation between the Serious Fraud Office and the Royal Malaysian Police, who arrested and extradited Dixon in September 2014.

Inter-agency discord?

While co-operation between national enforcement agencies appears to be growing, there are concerning signs that within certain jurisdictions there is a lack of co-ordination between different authorities. At best, this can cause duplication of work on both sides, while at worst it can undermine the investigation as well as the ability to progress towards a settlement with a particular agency.

The National Crime Agency maintains links with Interpol, Europol and Sirene, a further organisation with the aim of forging closer relationships between law enforcement agencies in the 28 EU Member States. The SFO has its own relationships with overseas authorities in its capacity as the lead agency for investigating foreign bribery by businesses within the UK. The relationship between enforcement agencies is governed by a Memorandum of Understanding between various agencies in the UK, including the SFO, NCA, City of London Police and Financial Conduct Authority, designed to promote co-operation and information sharing. The MoU specifies that all parties to it will attend a monthly meeting to discuss intelligence relating to bribery and corruption. Whether these meetings take place as regularly as this suggests is unknown.

However, in practice there are often signs of a less joined up approach. In October 2014, the SFO launched an investigation launched into the alleged accounting irregularities at Tesco, causing the FCA to drop an investigation it had started some weeks earlier. Despite the level of inter-agency contact suggested by the MoU and other public statements, there appeared to be a lack of co-ordination and some frustration at the FCA over this matter.

More serious concerns have been aired over the conduct of agencies in the US, where the many bodies at state and federal level mean that numerous regulators and prosecutors can run parallel investigations. Without co-ordination and the nomination of a lead agency, this can undermine attempts by companies to co-operate with investigations, as they struggle to manage competing requests for documents and information. Where certain agencies have a political agenda, this can also undermine attempts to deal with matters efficiently. For companies considering whether to self-report findings of potential wrongdoing, or the extent to which they should cooperate with enforcement agencies, this requires an initial consideration of how many, and which, agencies might become involved.

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