Self Reporting Not a Substitute for Vigorous Enforcement

Earlier this week, the Director of the UK Serious Fraud Office, which has responsibility for prosecuting foreign bribery cases, updated its earlier guidance on the benefits of self-reporting on overseas corruption. In a December 7th letter to Arnold & Porter, Richard Alderman answered questions on the criteria the SFO will apply when deciding whether to treat a self-reported matter criminally or civilly; the scope of investigation that will satisfy the SFO and avoid the need for additional, SFO-directed investigation; the circumstances for appointing monitors; treatment of attorney-client privilege; and whether the SFO will close a voluntary disclosure case without any actions.

In the absence of a credible threat of prosecution, the more fundamental question is whether offering benefits for self-reporting will effectively deter foreign bribery. Some companies may self-report and undertake restitution, training and sanctions in order to benefits such as civil sanctions rather than criminal prosecution; an opportunity to work with the SFO to manage issues and publicity; and a negotiated settlement rather than mandatory debarment from public contracts. Others may take their chances until the SFO has a track record of enforcement that creates the right incentives. While TI-USA commends the SFO for its efforts to foster corporate integrity and is encouraged by the prosecution of Mabey & Johnson Ltd (which arose from the company's voluntary disclosure), the UK still needs to enact a foreign bribery law and pursue major cases.