25th April 2016
In February 2016, Sweett Group plc were convicted and sentenced for failing to prevent bribery. Having pleaded guilty, they were ordered to pay £2.25 million, including a fine of £1.4 million, £851,000 in confiscation and £95,000 towards the prosecution costs of the Serious Fraud Office (“SFO”).
The Company had commenced their own internal investigation after media allegations in June 2013 and, having identified two suspicious contracts, reported them to the SFO. The SFO’s subsequent investigation found that one of the Company’s Middle Eastern subsidiaries has made corrupt payments to a person in the United Arab Emirates to secure a contract in Abu Dhabi.
It is an offence by an organisation under section 7 of the Bribery Act 2010 for an “associated person” to bribe another person either with the intention of obtaining (or retaining) business or in order to gain a business advantage. As an “associated person” includes anyone performing services for the organisation, this means that liability can arise as a result of the actions of not just employed staff, but also agents, consultants or subsidiary companies. The one possible “Get out of Jail Free” card for organisations is where they can show that they had “adequate procedures” in place to prevent this kind of unlawful conduct.
However and unfortunately for the multi-national and UK-listed Sweett Group, they had not put in place the necessary compliance controls across their business and were therefore unable to rely upon the statutory defence. The judge classed their very expensive omission as a “system failure”.
Sweett Group’s conviction is a reminder to all UK-connected organisations of the worldwide reach of the Bribery Act, together with the substantial fines and costs which the courts are willing to levy against defaulting parties. Organisations should put in place the necessary anti-bribery and corruption procedures across their whole business in order to better protect both their bank balance and their international reputation. This includes not just a well-publicised policy, but training of all employed staff and confirmation of adherence to compliance by all other business partners.
It is also essential that anti-bribery and corruption procedures are seen to have the full support of the organisation’s senior management so that the compliance message is enforced and the risk of non-compliance is reduced. Prospective and actual whistleblowers should be supported and, of course, non-compliance with anti-bribery and corruption procedures should be reflected in the taking of appropriate disciplinary action or lawful termination of contracts.
In November 2015, the Crown Court had approved the first ever deferred prosecution agreement (“DPA”) between the SFO and ICBC Standard Bank plc. In this case, the Bank agreed to pay in excess of $32.5 million for failing to prevent its Tanzanian affiliate from allegedly bribing Government officials to obtain business. In return, the SFO suspended its prosecution of the Bank pending its compliance with various undertakings, including that it review and upgrade its anti-bribery and corruption procedures. Apparently, the SFO didn’t give Sweett Group the opportunity of agreeing to a DPA, perhaps because they felt that they were not co-operating with them at some stage. Organisations should therefore be left in no doubt that the SFO is willing to show its teeth when it comes to their enforcement of the Bribery Act and, if and when it does, it requires full co-operation to minimise their bite.
Sophie Banks considers the use of employee images for marketing purposes under the GDPR and DPA 2018, and what steps an employer should take to prevent complaints of unlawful processing of data in this situation.
Within this edition of Mundays Business update you will find legal articles that we hope you will find useful and help you understand when you might need to seek legal advice.
Fiona Moss examines the approach to exchanging business cards under the EU General Data Protection Regulation (GDPR)