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Following its December guilty plea in the UK, global building and infrastructure company Sweett Group on Friday was ordered by a UK court to pay £2.25 million (including a fine of £1.4 million) for violating Section 7 of the UK Bribery Act of 2010. This was the first-ever conviction and sentence for a company under Section 7, which in essence penalizes companies for failing to prevent bribes made on their behalf. The conduct at issue related to a three-year arrangement in the UAE to secure contracts related to large building contracts. Prior FCPA Scorecard coverage is also available.
On December 2, 2015 the Sweett Group admitted to violating Section 7 of the U.K.s Bribery Act of 2010 failure to prevent bribery regarding its conduct in the Middle East. According to the Sweett Group, the underlying conduct was related to alleged bribery from 2009 to 2011 involving a former employee located in Dubai. While the SFO has not yet announced specifics associated with the conduct or any penalties that may be imposed, it previously announced the opening of its investigation into Sweett Groups activities in the United Arab Emirates and elsewhere. This investigation appeared to have been triggered by a 2013 Wall Street Journal article that reported allegations of bribery involving the construction of a hospital in Morocco. According to the WSJ, a bribe was offered to a United Arab Emirates officials personal foundation in order to secure the design work contract for the $100 million project.
On November 30, 2015 the United Kingdom’s Serious Fraud Office (SFO), working with the DOJ and SEC, entered into a deferred prosecution agreement (DPA) with Standard Bank under the U.K.’s Bribery Act of 2010 regarding payments by two former employees that were allegedly made to bribe members of the Tanzanian government. The DPA represents the SFO’s first-ever DPA and the first use of Section 7 of the Bribery Act, failure of commercial organizations to prevent bribery, by any U.K. prosecutor. As part of this DPA, Standard Bank has agreed to pay a combined $32.2 million in sanctions to the U.K. and Tanzania, and to cover the SFO’s litigation and investigation costs. The DPA also requires Standard Bank’s continued cooperation with authorities and the implementation of certain recommendations from its independent compliance consultants.
In addition to the DPA, Standard Bank agreed to pay $4.2 million to the SEC to settle charges related to the failure to disclose the underlying bribe payments in the bank’s offering documents and statements to potential investors. In light of Standard Bank’s cooperation with the SFO and the DPA, the DOJ reportedly closed its own investigation without bringing independent charges.
Notably, in one of the first examples of the SEC implementing its plan to make more defendants admit to the allegations against them as part of resolutions, Standard Bank agreed to the facts underlying the SEC charges.
Hank Lindsley is a managing regulatory attorney in the Washington, DC, office of Buckley Sandler LLP. Mr. Lindsley assists clients in the financial services industry, primarily in litigation, regulatory and compliance matters. Mr. Lindsley provides litigation support and assists with large scale document reviews and productions related to complex litigation. Prior to joining Buckley Sandler, Mr. Lindsley worked on large SEC/DOJ Second Request productions and complex Real Estate Investment Trust regulatory compliance matters for a number of law firms in Washington, D.C.
Mr. Lindsley received his J.D. from the S.J. Quinney College of Law at the University of Utah in 2001, where he was a member of the Journal of Law and Family Studies. He received his B.S. from the University of Utah in Political Science in 1998
- On Tuesday, the Department of Justice announced that it will offer "detailed new guidance on the [US FCPA's] criminal and civil enforcement provisions" in 2012. In the same conference keynote address, Assistant Attorney General for the Criminal Division Lanny Breuer spoke about a number of additional aspects of the US approach to anti-corruption issues, including recent enforcement initiatives, efforts at multilateral collaboration and DOJ actions to seize the proceeds of foreign officials engaged in corruption. The full text of Breuer's remarks may be found here. The concept of DOJ-issued guidance is not a new one. Indeed, as part of FCPA amendments in 1988, the DOJ was required to consider whether guidance would be helpful. After a public notice and comment process, the DOJ in 1990 declined to issue guidance. See here for a 2010 blog posting on this issue. The idea gained renewed traction in the US following passage of the UK Bribery Act, which includes a provision requiring the UK Ministry of Justice to issue guidance on compliance procedures, and during recent debate about potential amendments to the FCPA. At the moment, there is no further word on what exactly the DOJ's "detailed new guidance" will address, nor is there word on whether the process of developing the guidance will be subject to public commentary. For in-house counsel, it would be most helpful to have the DOJ's specific views on the following subjects: (1) the scope of the affirmative defense for promotional expenses, such as meals, token gifts, business entertainment and travel; (2) when employees of state-owned, state-controlled or state-involved enterprises qualify as "foreign officials;" (3) the territorial contacts sufficient to trigger US jurisdiction over "persons other than issuers or domestic concerns;" and, (4) whether and when the statute's expressly-listed examples of "facilitating and expediting payments" qualify for the exception. There is certain to be extensive discussion about the guidance, and we will keep you posted on progress as it unfolds.
- Hank Asbill to discuss "The federal fraud sentencing guidelines: It's time to stop the madness" at a New York Criminal Bar Association webinar
- Daniel P Stipano to moderate "Digital identity: The next gen of CIP" at the American Bankers Association/American Bar Association Financial Crimes Enforcement Conference