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Time to come clean

18 July 11

A new initiative encourages businesses to self-report bribery and corruption that they have discovered within their organisation

by Lindsey Miller

The Bribery Act 2010 restates the law of bribery for the 21st century. The legislation applies across the UK and will provide an important weapon in the fight against bribery and corruption. We do not believe this is rife in our business community, but would not wish to be complacent. The recent prosecution of Weir Group plc for paying bribes to Saddam Hussein’s government in breach of UN sanctions indicates that the problem is not unknown in Scotland. The Crown Office and Procurator Fiscal Service will take all necessary action to implement the Act in furtherance of its aims.

The Lord Advocate has instructed that from 1 July the police are to report all bribery cases, including any concerning bribery and corruption occurring before 1 July, to the Crown Office’s Serious and Organised Crime Division (SOCD), where they will be dealt with by a specialist team. All decisions about criminal proceedings will be taken by Crown counsel. The Law Officers will take an active interest, and will personally consider any cases deemed to be particularly sensitive.

Gaining credit

To coincide with the implementation of the Act, and in order to contribute to a corporate culture in which bribery is not hidden once discovered, the Lord Advocate has approved an initiative for businesses (i.e. corporate bodies or partnerships) to “self-report” bribery offences committed by the business. It is hoped that this will encourage reporting of wrongdoing before it otherwise comes to light.

The initiative is not a soft option, and is about finding the right solutions about this type of offending. We will consider what action requires to be taken in the public interest in each case. By reporting to us, businesses will show they are taking action to remedy serious misconduct in their organisation. This will protect their reputation.

Where criminal proceedings are required, the business will receive credit from the courts for coming forward, admitting what has gone wrong, and saving public time and money in investigation. In other cases, the matter can be dealt with by referral to the Civil Recovery Unit (CRU). This will not mean avoiding sanctions, as the business will be required to repay sums of money unlawfully obtained.

Any action taken by the Crown, whether by way of prosecution or civil recovery, will be made public. This initiative is one of a number of means we will use to fight against this serious and insidious crime.

12-month trial

The Crown will accept reports from businesses, via their solicitor, which wish to report the discovery by them of conduct that may amount to an offence under the Bribery Act (or an analogous offence under the law before 1 July). The business will require to make full disclosure of any offence committed and of the extent of wrongdoing within the organisation. It ought to have carried out an investigation into the circumstances, and must be willing to share any report with the Crown. It must agree to co-operate with any investigation and indicate what steps have been taken to prevent a recurrence.

The report from the business will be assessed within SOCD for a preliminary decision as to whether the case merits referral to the CRU, or whether the public interest requires a criminal investigation. If the former, a recommendation will be made to Crown counsel to this effect. If Crown counsel agrees, CRU will make further enquiry and consider whether the case would be suitable for civil settlement. If so, a report will be prepared recommending to Crown counsel that there be no criminal proceedings. If this is accepted, the business will be so advised, subject to completion of civil settlement.

The initiative will run for 12 months from 1 July 2011, and then be reviewed. To participate, businesses will require to submit a report via a solicitor to SOCD before 30 June 2012. I must stress that, while consideration will be given at that point to extending the initiative, businesses should not assume that there will be an extension.

This initiative is similar to a scheme operated in England, Wales and Northern Ireland by the Serious Fraud Office (SFO). There has been discussion between Crown Office and the SFO as to its introduction in Scotland, and there will be continuing liaison between Crown Office and the SFO in relation to any cases where there are cross-border issues. Each case will have to be considered individually. Examples of factors that suggest a business should report to Crown Office in the first instance are where the business has its headquarters or registered office in Scotland; or predominantly carries on its business in Scotland; or, most importantly, where the wrongdoing that it has identified has taken place in, or mostly in, Scotland.

I hope that businesses will be encouraged to self-report any cases involving bribery within their organisations without delay.

A more detailed version of how the initiative will work can be found at the Crown Office website www.copfs.gov.uk/news/releases/2011/07/implementation-bribery-act-and-self-reporting-initiative-businesses Staff within SOCD will be available to discuss any issues raised by this article or to have preliminary discussion about a particular case – contact 0131 243 8203.

Lindsey Miller, Head of the SOCD, Crown Office

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