Ed. Note-today we are pleased to host our the newest addition to i-sight.com, Dawn Lomer for a guest posting.
As the implications of the News Corp scandal wend their way across the pond with a real possibility of US charges being filed, the global reach of anti-corruption legislation becomes more and more evident. A UK, US or Canadian company has to be concerned not only about abiding by the laws of its own country, but also the laws of any country under whose jurisdiction some of its activities may fall. This is especially true today, in light of the new UK Bribery Act, with power to prosecute some foreign companies for bribery that takes place anywhere the world.
At the same time, there’s considerable pressure, from the OECD for example, for countries with weak anti-corruption legislation and enforcement to step up to the plate and take responsibility for preventing and prosecuting corruption on a global scale. Canada has come under recent scrutiny for its weak anti-corruption laws and dearth of prosecutions.
Canada Tackles Corruption
This criticism may be about to change, however, says Anthony Cole, a UK lawyer practicing in Calgary with Christine Silverberg, retired Chief of Police and lawyer of the firm Wolch, Hursh, deWit, Silverberg & Watts. He cites the establishment of two RCMP overseas anti-corruption teams inOttawaandCalgaryas a positive sign for strengthening anti-corruption measures in the country. “This is especially so in light of the statement by representatives of those teams that they have over 20 active investigations,” he says.
Cole compares the situation in Canada to that of the UK several years ago, when law enforcement agencies in the UK, led by the Serious Fraud Office, realized that the UK Proceeds of Crime Act, and in particular the civil recovery powers created under that Act, could be a powerful tool in tackling corruption.
Long Arm of the UK Bribery Act
“The new UK Bribery Act will provideUKlaw enforcement authorities with a far more effective means of ensuring the successful criminal prosecution of companies and individuals who engage in, or indeed fail to prevent, bribery overseas,” he says.
“It will be interesting to see whether the Proceeds of Crime Act will continue to be used frequently in overseas bribery cases, or whether the favored approach will be to prosecute solely under the Bribery Act whenever possible. I think that, at least initially, there will be a desire to use the new Bribery Act, but what happens in the long term will probably be determined by the success of the prosecutions in the early stages of the Act being in force”, says Cole.
US is the Global Champion in Anti-Corruption
A fundamental difference between theUKandUSlegislation governs overseas corruption: in contrast to theUS, the UK Bribery Act is not restricted to the corruption of public officials, but also applies to purely private sector bribery. “In this regard, its scope is significantly wider than the US Foreign Corrupt Practices Act (FCPA),” says Cole. “That said, theUShas a remarkable track record in handling overseas anti-corruption cases, and is, at present, the unquestioned global champion in the fight against corruption. The means through which theUShandles such cases, though, is different.”
Cole explains that most overseas corruption cases handled by US authorities do not result in criminal convictions following trial, but rather are dealt with as civil violations or are resolved by plea agreements or deferred prosecution agreements at a very early stage.
“The favored approach ofUSlaw enforcement agencies dealing with corporate overseas corruption cases seems to be to encourage self-reporting and an early plea or settlement by the corporation, resulting in a huge fine or disgorgement, but often allowing the corporation the opportunity to issue a face-saving joint press-release with the relevant law enforcement agency,” he says. Law enforcement agencies, in this way, can secure a high-profile victory without committing vast resources to each case, so they can deal with a much larger number of cases.
Serious Bribery as a Serious Crime
The settling of bribery and corruption cases by what might be described as plea bargaining, and the frequent use of civil settlements of civil recovery proceedings (which might involve a joint press-release), was adopted by the Serious Fraud Office in the UK, says Cole, but it received withering criticism from one of the UK’s most senior criminal judges, who appeared to suggest that the criminal justice procedure applied to perpetrators of serious bribery should be no different from that applied to burglars or rapists. The Serious Fraud Office vowed to change its practices, reflecting the preference of the English Courts to see serious bribery and corruption dealt with by criminal process, rather than by civil process and plea bargaining, as appears to be favored by US authorities.
Dawn Lomer the Corporate Journalist at Customer Expressions, developers of i-Sight investigative case management software. With 20 years of experience as a writer and editor in Canada, the Caribbean and the Middle East, she brings a global perspective to the subjects she covers. She joins Lindsay Walker in writing for the company’s blog i-Sight.com.
Ed. Note-The prior post of this blog incorrectly miss-spelled the name of the author. The correct spelling is Lomer.