On 5 April 2016, The Scottish Crown Office and Procurator Fiscal Service (“COPFS”) announced the latest resolution of a Bribery Act enforcement action against the Glasgow-based logistics company, Braid Logistics (UK) Limited.

Braid agreed to pay £2.2 million pursuant to a Civil Recovery Order and accepted responsibility for contravention of sections 1 and 7 of the Bribery Act 2010 (section 7 being the so-called ‘corporate offence’ of ‘failure to prevent’ bribery).

This is the latest development in an exciting few months in anti-corruption enforcement.

Earlier this year, in two eagerly anticipated judgments, the Court applied for the first time in a contested corporate case the Sentencing Council’s 2014 Definitive Guideline: Fraud, Bribery and Money Laundering Offences (the “Guideline”), and sentenced a company following a successful prosecution under section 7 of the Bribery Act.

These two cases, Smith & Ouzman Limited and Sweett Group Plc, represent the first steps in building a body of much-needed experience of the Court’s approach to the Guideline, following the first DPA entered by the SFO last year.

This briefing provides an overview of the Braid, Smith & Ouzman and Sweett Group cases, and explains how the penalties imposed on the companies were determined.

http://bit.ly/1YivOMU

Comment

1. One particular point of interest in the Sweett Group case is the question of corporate cooperation and its impact on DPA availability and penalty levels.
2. Sweett Group had self-reported itself to the SFO only a week before a Wall Street Journal article was published, linking it to bribery allegations (according to the SFO’s counsel, in anticipation of that article being published), and continued to make some relevant payments even after the investigation had commenced. It appears that there were disputes as to the provision of witness evidence to the SFO and, in a somewhat embarrassing incident in 2014, the company was forced to clarify in a public announcement (it is AIM-listed) that it was “doing all that it reasonably can to cooperate with the SFO investigation while at the same time exercising its fundamental right to legal professional privilege in fulfilling its corporate and regulatory requirements” after the SFO objected to a previous statement that it was “continuing to cooperate”.
3. The SFO had at one stage held open the possibility of DPA negotiations, which seems to have coincided with a change in the company’s approach to the investigation; as noted above, Sweett Group’s cooperation was acknowledged by HHJ Beddoe to have improved from 2015. Ultimately, however, a DPA was not offered to the company.
4. The multiplier adopted by the Court in the Sweett Group case was 250%, in the Smith & Ouzman case (where the company pleaded not guilty) was 300%, and in the SFO’s previous DPA, a case of “exemplary” cooperation, a 300% multiplier was adopted.
5. A number of factors feed into the multiplier, of course, and it seems that, whilst cooperation may be critical to the availability of a DPA (hence, perhaps its ultimate unavailability to the Sweet Group), its impact on fine levels may be more limited. Otherwise, these cases are the just the start of a body of knowledge as to how the Guideline will be applied, which will need to be developed over time in the event of the SFO obtaining further convictions, and deployed in DPA negotiations.
6. The SFO has a number of significant corporate bribery investigations and prosecutions under way; one of the ‘next up’ is Alstom Network UK Limited, in a case which is scheduled for June 2016 relating to alleged corruption in India, Poland and Tunisia. Interested readers should continue to “watch this space” closely.