Abstract
This chapter explores how responsible enforcement authorities, specifically the Serious Fraud Office in the UK, have targeted the proceeds of transnational corporate bribery generated for those corporations on the ‘supply side’ of the illicit transaction. The chapter analyses legal developments at the domestic and international level that provide a framework for the pursuit of the proceeds of corruption before going on to consider the specific control mechanisms available for targeting these proceeds, including confiscation, civil recovery, disgorgement, compensation, reparation and restitution alongside other sanctions such as criminal fines and voluntary payments. We consider where these monies actually go and for what purpose. We conclude with a discussion of key issues in dealing with the proceeds of corruption and consider likely future scenarios in this area.
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Notes
- 1.
Jurisdictionally, this chapter covers only England, Wales, and Northern Ireland. Scotland, although covered by the UK-wide Bribery Act 2010, constitutes a separate legal system with enforcement undertaken by the Crown Office and Procurator Fiscal Service, Scotland’s Prosecution Service.
- 2.
The SFO’s first DPA was given to Standard Bank in November 2015 <www.sfo.gov.uk/2015/11/30/sfo-agrees-first-uk-dpa-with-standard-bank/> accessed 5 December 2016.
- 3.
Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia.
- 4.
For the SFO’s press release on the Rolls Royce DPA, see <www.sfo.gov.uk/2017/01/17/sfo-completes-497-25m-deferred-prosecution-agreement-rolls-royce-plc/> accessed 13 March 2017.
- 5.
Rolls Royce also reached agreements with the US Department of Justice and Brazil’s Ministério Público Federal. These agreements result in the payment of approximately US$170m to the USA and $25m to Brazil.
- 6.
See SFO, Press Release (19 February 2016) <www.sfo.gov.uk/2016/02/19/sweett-group-plc-sentenced-and-ordered-to-pay-2-3-million-after-bribery-act-conviction/> accessed 9 November 2016.
- 7.
Home Secretary’s Opening Speech, Ukraine Forum on Asset Recovery (April 2014) quoted in HM Government, UK Anti-Corruption Plan (Crown Copyright 2014) 41 <www.gov.uk/government/uploads/system/uploads/attachment_data/file/388894/UKantiCorruptionPlan.pdf> accessed 9 November 2016.
- 8.
Nicholas Lord and Alan Doig, ‘Transnational Corporate Bribery’ in Gerben Bruinsma and David Weisburd (eds), Encyclopedia of Criminology and Criminal Justice (Springer 2014).
- 9.
Nicholas Lord, Regulating Corporate Bribery in International Business: Anti-corruption in the UK and Germany (Routledge 2014).
- 10.
Lord and Doig (n 8); Lord (n 9).
- 11.
Nicholas Lord, ‘Establishing Enforcement Legitimacy in the Pursuit of Rule-Breaking “Global Elites”: The Case of Transnational Corporate Bribery’ (2015) 20(3) Theoretical Criminology 376; Ian Clark, International Legitimacy and World Society (OUP 2007).
- 12.
When the USA introduced the Foreign Corrupt Practices Act 1977, it was expected that other nation-states would follow suit. This did not immediately occur and so enforcement of the Act did not follow until the creation of the OECD Anti-Bribery Convention, which created international pressure for other countries to implement analogous legislation.
- 13.
GRECO, Evaluation Report on the United Kingdom on Incriminations (ETS 173 and 191, GPC 2 2007); OECD, Phase 3 Report on Implementing the OECD Anti-Bribery Convention in the United Kingdom (OECD 2012).
- 14.
These changes are fully explained in Clive Walker, The Anti-Terrorism Legislation (OUP 2002) para 6(10).
- 15.
Bribery Act 2010, ss 1, 2, 6 and 7.
- 16.
David Leigh and Rob Evans, ‘How Blair Put Pressure on Goldsmith to end BAE Investigation’ The Guardian (London, 21 December 2007) <www.theguardian.com/world/2007/dec/21/bae.tonyblair> accessed 20 March 2017.
- 17.
Nicholas Lord and Michael Levi, ‘Organizing the Finances for and the Finances from Transnational Corporate Bribery’ (2016) European Journal of Criminology (advance access).
- 18.
Lord (n 9).
- 19.
Michael Levi, ‘Money for Crime and Money from Crime: Financing Crime and Laundering Crime Proceeds’ (2015) 21(2) European Journal on Criminal Policy and Research 275, 284.
- 20.
See SFO, Press Release, ‘Shareholder Agrees Civil Recovery by SFO in Mabey & Johnson’ <www.betterregulation.com/external/Civil%20Recovery%20of%20Dividends%20from%20Shareholders.pdf> accessed 5 December 2016.
- 21.
For discussion of lawyers and money laundering, see Chap. 6 (Benson) in this collection.
- 22.
Levi (n 19) 284.
- 23.
Susan Rose-Ackerman, Corruption and Government: Causes, Consequences and Reform (CUP 1999) 98.
- 24.
Financial Action Task Force, ‘Laundering the Proceeds of Corruption’ (2011) <www.fatf-gafi.org/media/fatf/documents/reports/Laundering%20the%20Proceeds%20of%20Corruption.pdf> accessed 20 March 2017.
- 25.
Transparency International, ‘The Anti-Corruption Plain Language Guide’ (2009) 23 <www.transparency.org/whatwedo/publication/the_anti_corruption_plain_language_guide> accessed 5 December 2016.
- 26.
Nicholas Lord, ‘Responding to Transnational Corporate Bribery Using International Frameworks for Enforcement: Anti-bribery and Corruption in the UK and Germany’ (2014) 14(1) Criminology and Criminal Justice 100.
- 27.
Lord (n 9).
- 28.
UN Convention Against Corruption (adopted on 31 October 2003, open for signature on 9 December 2003), Chapter V.
- 29.
Transparency International, Exporting Corruption—Progress Report 2015: Assessing Enforcement of the OECD Convention on Combatting Foreign Bribery (2015) <www.transparency.org/exporting_corruption> accessed 20 March 2017.
- 30.
Though the arbitrary formulation of these categorisations is problematic. See Lord (n 9); Nicholas Lord and Michael Levi, ‘Determining the Adequate Enforcement of White-Collar and Corporate Crimes in Europe’ in Judith van Erp, Wim Huisman, and Gudrun Vande Walle (eds), The Routledge Handbook of White-Collar and Corporate Crime in Europe (Routledge 2015).
- 31.
See SFO, ‘About Us’ <www.sfo.gov.uk/about-us/> accessed 25 November 2016.
- 32.
See CPS, ‘Confiscation and Ancillary Orders pre-POCA: Proceeds of Crime Guidance’ <www.cps.gov.uk/legal/a_to_c/confiscation_and_ancillary_orders/#whatis> accessed 9 November 2016. For discussion of the law governing confiscation orders, see Chap. 19 (Hopmeier and Mills) in this collection.
- 33.
For analysis, see Lord (n 9); Lord (n 26).
- 34.
For discussion of civil recovery powers, see Chap. 22 (Alldridge) in this collection.
- 35.
Nicholas Lord, ‘Transnational Corporate Bribery: Anti-Bribery and Corruption in the UK and Germany’ (2013) 60(2) Crime, Law and Social Change 127; Lord (n 9).
- 36.
Attorney General’s Office, ‘Guidance for Prosecutors and Investigators on Their Asset Recovery Powers Under Section 2A of the Proceeds of Crime Act 2002’ (November 2012) <www.gov.uk/guidance/asset-recovery-powers-for-prosecutors-guidance-and-background-note-2009> accessed 9 November 2016.
- 37.
David Leigh and Rob Evans, ‘Balfour Beatty Agrees to Pay £2.25 m Over Allegations of Bribery in Egypt’ The Guardian (London, 7 October 2008) <www.theguardian.com/business/2008/oct/07/balfourbeatty.egypt> accessed 20 March 2017.
- 38.
See SFO, Press Release, ‘Oxford Publishing Ltd to Pay Almost £1.9 Million as Settlement after Admitting Unlawful Conduct in its East African Operations’ <www.sfo.gov.uk/2012/07/03/oxford-publishing-ltd-pay-almost-1-9-million-settlement-admitting-unlawful-conduct-east-african-operations/> accessed 25 November 2016.
- 39.
HM Crown Prosecution Service Inspectorate, Report to the Attorney General on the Inspection of the Serious Fraud Office (2012) <www.justiceinspectorates.gov.uk/crown-prosecution-service/wp-content/uploads/sites/3/2014/04/SFO_Nov12_rpt.pdf> accessed 2 December 2016.
- 40.
HM Crown Prosecution Service Inspectorate, Follow-up Inspection of the Serious Fraud Office (2014) <www.justiceinspectorates.gov.uk/hmcpsi/wp-content/uploads/sites/3/2014/11/SFOFU_Nov14_rpt.pdf> accessed 2 December 2016.
- 41.
Robert J Ridge and Mackenzie A Baird, ‘The Pendulum Swings Back: Revisiting Corporate Criminality and the Rise of Deferred Prosecution Agreements’ (2008) 33(2) University of Dayton Law Review 187, 197; Peter Spivack and Sujit Raman, ‘Regulating the “New Regulators”: Current Trends in Deferred Prosecution Agreements’ (2008) 45 American Criminal Law Review 159.
- 42.
David M Uhlmann, ‘Deferred Prosecution and Non-Prosecution Agreements and the Erosion of Corporate Criminal Liability’ (2013) 72(4) Maryland Law Review 1295, 1302.
- 43.
Mike Koehler, ‘Measuring the Impact of Non-Prosecution and Deferred Prosecution Agreements on Foreign Corrupt Practices Act Enforcement’ (2015) 49 University of California, Davis Law Review 497.
- 44.
For discussion, see Michael Bisgrove and Mark Weekes, ‘Deferred Prosecution Agreements: A Practical Consideration’ [2014] Criminal Law Review 416.
- 45.
Ridge and Baird (n 41) 203.
- 46.
Jennifer Arlen, ‘Prosecuting Beyond the Rule of Law: Corporate Mandates Imposed Through Deferred Prosecution Agreements’ (2016) 8(1) Journal of Legal Analysis 191.
- 47.
Monty Raphael, Bribery: Law and Practice (OUP 2016) 73.
- 48.
For an explanation of the Full Code Test, see the Code for Crown Prosecutors <www.cps.gov.uk/publications/code_for_crown_prosecutors/codetest.html> accessed 2 December 2016.
- 49.
While the first two DPAs with Standard Bank and the Anonymous SME involved ‘self-reports’, this was not the case with Rolls Royce as SFO became aware of the corruption via whistleblowers. This has led some to suggest the SFO had ‘a failure of nerve’: Corruption Watch, A Failure of Nerve—The SFO’s Settlement with Rolls Royce <www.cw-uk.org/2017/01/19/a-failure-of-nerve-the-sfos-settlement-with-rolls-royce/> accessed 13 March 2017.
- 50.
Ved P Nanda, ‘Corporate Criminal Liability in the United States: Is a New Approach Warranted?’ in Mark Pieth and Radha Ivory (eds), Corporate Criminal Liability. Emergence, Convergence and Risk (Springer 2011) 65.
- 51.
Susanne Karstedt, ‘Creating Institutions: Linking the “Local” and the “Global” in the Travel of Crime Policies’ (2007) 8(2) Police Practice and Research 145.
- 52.
Spivack and Raman (n 41) 161.
- 53.
Allen R Brooks, ‘A Corporate Catch-22: How Deferred and Non-Prosecution Agreements Impede the Full Development of the Foreign Corrupt Practices Act’ (2010) 7 Journal of Law, Economics and Policy 137, 156.
- 54.
Raphael (n 47) 166.
- 55.
Brandon Garrett, Too Big To Jail: How Prosecutors Compromise with Corporations (Harvard University Press 2014).
- 56.
See SFO v Standard Bank Case no U20150854 [39].
- 57.
See R v BAE Systems Case no S2010565.
- 58.
The ARIS agreement with the SFO is explained on the SFO’s website <www.sfo.gov.uk/about-us/> accessed 2 December 2016.
- 59.
Raphael (n 47) 169.
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Lord, N., Levi, M. (2018). In Pursuit of the Proceeds of Transnational Corporate Bribery: The UK Experience to Date. In: King, C., Walker, C., Gurulé, J. (eds) The Palgrave Handbook of Criminal and Terrorism Financing Law. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-64498-1_26
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