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Corporate criminal enforcement: a continuing trend?

The regular reporting of corporate criminality is now a common sight in recent times. Cases such as the Rolls Royce deferred prosecution agreement, which resulted in a penalty of £497.25 million made national news. Likewise, the recent sham football apprentice case, which led to conviction for a £5 million coaching scam hit the headlines.

There has been an increase in the legal burdens imposed on corporations mirrored with a greater willingness of agencies such as the SFO to tackle the largest corporate offenders. New sentencing guidelines for a variety of offences have substantially increased both the penalties available, and the willingness of the Courts to hand out heavy fines.

This pincer of an increased legal burden, combined with increased enforcement is a worry for many companies. The introduction of criminal liability for "failure to prevent" offences (discussed in previous articles here and here), make it clear that the UK is taking a particularly hard line on corporate transparency and corruption. Prosecutions for failing to prevent bribery show that these new types of offences are not empty threats, and the SFO are becoming more and more familiar with this new weapon in their armoury.

This trend seems highly likely to continue, as evidenced by the contents of the "United Kingdom Anti-Corruption Strategy 2017-2022" that was published late last year.

Overall, the strategy indicates that the government will look to strengthen the ability of UK investigatory and prosecutorial bodies to deal with large scale corporate offences up to, and after conviction, including greater powers to investigate offences and recover assets.

This approach is further demonstrated in the appointment of a Minister responsible for Economic Crime at the Home Office, as well as continuing consideration of whether the "failure to prevent" offences discussed above could be specifically extended to other corporate offences such as fraud, false accounting and money laundering.

Another interesting suggestion from the Strategy is the creation of the National Economic Crime Centre based in the National Crime Agency. How this new centre will impact the practices of current agencies such as the SFO and FCA remains to be seen.

In this landscape of increased scrutiny and enforcement, corporations should ensure that they have proper procedures in place to prevent corporate criminal offences. These procedures need to be reviewed regularly to ensure that they are practically implemented, respond to changing needs and threats, and, most importantly that they practically work on a day to day basis.                                                                                  

If you have any questions regarding corporate criminal offences, please contact the Business Risk and Regulation Team on 0117 321 8021.

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