Policy and practice
UK: New definitive sentencing guideline for fraud, bribery and money laundering offences published
The Sentencing Council has published a new definitive guideline on sentencing for fraud, bribery and money laundering offences, which incorporates full guidelines for adult individual offenders, as well as the specific guidelines for corporate offenders (discussed in the February 2014 edition of Financial Crime Update). Both aspects of the guideline come into effect with regard to sentences handed down on or after 1 October 2014.
As for corporates, the appropriate sentence for individual offenders is to be assessed by calculating the culpability of the offender and the harm caused. For bribery by an individual, for example, factors indicating a high degree of culpability include that the individual has played a leading role in the offence or that the offence includes the abuse of a position of significant power, trust or responsibility. Lesser culpability would be demonstrated where, for example, the offence was opportunistic or ‘one-off’ or where the individual had a limited awareness of the extent of corrupt activity.
The level of harm will be determined by factors such as the seriousness and extent of the detrimental effect on innocent individuals or the environment, whether it undermined local or national government and the amount of actual or intended financial gain to the offender or loss caused to others.
An individual playing an important role in a sophisticated bribery carried out over a period of time, which results in considerable loss to third parties (so the highest categories of both culpability and harm) can expect to be sentenced to between five and eight years custody, with a starting point of seven years. Additional factors will also be taken into account which may either aggravate the seriousness of the crime (and sentence) or reduce it.
Where a company has been found guilty of an offence of bribery under the Bribery Act 2010, any director or officer who has connived or consented to the offence may also be prosecuted for the same offence, in which case these guidelines will apply should they also be convicted.
UK: New ABC guidance published by BBA
The British Bankers’ Association has published “Anti-bribery and corruption guidance: Practical guidance for the banking sector in complying with the Bribery Act 2010 and meeting FCA obligations” (May 2014). The guidance includes commentary on the main Bribery Act offences and compares the Bribery Act with other obligations faced by the regulated sector, including FCA compliance and the implications of the US FCPA. Separate guidance is included on the application of the Ministry of Justice’s six principles to the regulated sector and the appropriate response of financial institutions.
The guide is available here.
UK: Agreement between SFO and CMA may bolster cartel prosecutions
The SFO and the Competition and Markets Authority (“CMA”) have signed a memorandum of understanding, in which they have agreed to bolster mutual cooperation and intelligence-sharing in the investigation of criminal cartel offences (under section 188 of the Enterprise Act 2002), where serious or complex fraud is suspected, including price-fixing, limitation of production or supply, market-sharing and bid-rigging.
While the CMA will remain responsible for undertaking preliminary investigations into cartel activity, it will be able to pass cases onto the SFO to pursue and ultimately prosecute. Likewise, the SFO will refer any information it receives indicating cartel activity onto the CMA’s cartels and criminal enforcement group. Staff may also be shared between the two agencies where appropriate. Where the CMA has granted leniency, the SFO will be barred from attempting to prosecute individuals or pursue apparent cartel activity using another offence, such as conspiracy to defraud. However, to ensure that this arrangement does not affect future investigations or prosecutions by the SFO, the CMA has to consult the SFO before granting leniency in such cases.
A previous agreement signed in 2003 between the SFO and the Office of Fair Trading, (the CMA’s predecessor) contained similar provisions but does not appear to have been used often. Commentators suggest that this new memorandum may result in the CMA referring more cases to the SFO.