Corruption Enforcement Tracker

corruption enforcement tracker

Click on the image above to download our guide to enforcement of corruption and bribery laws since 2008.

Overview

This tracker provides a headline view of action taken by the UK prosecuting authorities in respect of  corruption offences committed by both corporates and individuals. There are a number of authorities who are charged with the investigation and prosecution of corruption  offences in the UK. These include the Crown Prosecution Service (CPS), the Serious Fraud Office (SFO), the Financial Conduct Authority (FCA), the National Crime Agency (NCA) and Scotland’s Crown Office and Procurator Fiscal Service (Crown Office). The NCA was established in October 2013 to oversee the law enforcement response to bribery and corruption. However, the SFO remains the lead agency  for investigating large and complex cases of corporate bribery and corruption, and enforcing the Bribery Act in respect of overseas corruption by British businesses. The FCA has no jurisdiction to prosecute cases of bribery, but can impose sanctions on a regulated institution for failing to have adequate systems and controls in place to prevent bribery.

While there has been a considerable amount of corruption enforcement activity in recent years, only a limited number of prosecutions have been brought under the Bribery Act 2010. To date, there has only been one corporate conviction (following a guilty plea), and three Deferred Prosecution Agreements (DPAs) entered into, all of which are in respect of offences under section 7 of the Bribery Act. Further, the SFO has confirmed publicly that it has a number of significant corporate investigations ongoing, and so it may not be long before further Bribery Act charges are brought.

Key sectors which have historically been vulnerable to enforcement action globally include the extractive industries, and also manufacturing/service providers, with both sectors together representing approximately 35% of known domestic and foreign bribery enforcement activity. 1In recent times, the pharmaceuticals industry and the financial services sector have also come under scrutiny by regulators across the globe. Enforcement activity in the UK is likely to have a similar focus, the SFO having confirmed that it will conduct "sweeps" of sectors it considers to be the most vulnerable to economic crime, such as construction, public contracts and the oil and gas industry.

This tracker follows enforcement by the UK authorities only. However, it is worth noting that enforcement activity is also on the increase in a number of other jurisdictions. UK companies operating overseas may find themselves increasingly under the scrutiny of the domestic authorities in the countries in which they operate.

Corporates

Criminal penalties recently levied against corporate bodies for corruption offences have included a $16.8m penalty under the first DPA in the UK (ICBC Standard Bank), together with payments of $6m in compensation and a $8.4m disgorgement of profits, a £352,000 penalty under the second DPA in the UK (XYZ Ltd), together with a £6.2m disgorgement of profits, a £1.4m fine (Sweett Group) and a £1.3m fine (Smith & Ouzman). In January 2017, a penalty in excess of £239m was imposed under the third UK DPA, together with a £258m disgorgement of profits (Rolls-Royce plc).

The SFO has in the past issued a number of civil recovery orders against corporate bodies for corruption offences, ranging between £130,000 (Mabey Engineering (Holdings) Ltd) and £11.26m (Macmillan Publishers Limited). FSA and FCA fines for regulatory breaches have ranged from £315,000 (Besso Limited) to £6.895m (Willis Limited). More recently, the Crown Office has recovered £2.2m under an agreed civil settlement (Braid Group (Holdings) Limited), and made a £212,800 civil recovery order under the Proceeds of Crime Act 2002 (Brand-Rex Limited).

Other sanctions for corporate corruption have included debarment from participating in World Bank funded tenders (Macmillan Publishers Limited), requirements to amend internal controls (MW Kellogg Limited), and monitoring orders (Innospec Ltd and AMEC).

Individuals

In connection with the corruption investigations set out in this tracker, 72 custodial sentences have been handed down to individuals. These sentences range between two months imprisonment (suspended for 12 months) (Mushtaq) to 15 years imprisonment (David Mills). Of the total number of convictions, 34 were handed down following prosecutions brought by the SFO; five convictions resulted from prosecutions brought by the NCA; seven convictions resulted from prosecutions brought by the City of London Police; four convictions resulted from prosecutions brought by the Scotland (Crown Office and Procurator Fiscal Service); and 22 convictions resulted from prosecutions brought by the CPS.

The most significant financial penalties directed at individuals include a £1m confiscation order made against James McGeown, and a £100,000 order for compensation to the people of Costa Rica, made in the case of Julian Messent. Other sanctions for corruption offences committed by individuals include disqualification from acting as a company director, a curfew order, unpaid work and supervision orders.


1 Global Enforcement Report (GER) 2013 TRACE. TRACE compiles data on cases and investigations that have a cross-border component and involve the allegation of a bribe made to a government official or to an employee of a state-owned entity. Purely domestic matters involving local companies bribing local government officials are not included in the Global Enforcement Report.

October 2014

This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.