British companies that bribe foreign officials to win contracts, commit fraud, or launder money, face fines of up to 400 per cent of their illicit profits, under new penalty guidelines
May 25, 2014 Leave a comment
May 22, 2014 11:57 pm
Corrupt companies face fines of 400% of illicit profits
By Caroline Binham, Legal Correspondent
British companies that bribe foreign officials to win contracts, commit fraud, or launder money, face fines of up to 400 per cent of their illicit profits, under new penalty guidelines.
In the most serious cases companies will pay fines comparable with those meted out in the US, where penalties can be as high as hundreds of millions of dollars, legal experts said.
The proposals for England and Wales, which will be set out on Friday by the Sentencing Council, allow judges for the first time to weigh harm done to the victim rather than purely the financial amount defrauded.
The plans, which were first floated last summer, are part of wider penalties for individuals found guilty of committing white-collar crime, and are expected to come into force in October. Current guidelines for financial crime do not cover corporate offences, which has led to varying sizes of financial penalties.
“Because of the cross-border element to fraud and bribery investigations, it was really key in the UK that we get fines that have some sort of accord with what is going on in the States,” said Jonathan Fisher QC, who specialises in financial crime cases.
While the council cannot set maximum sentences, which is done by legislation, it gives judges a range of penalties to consider, as well as laying out aggravating and mitigating factors.
Circumstances that would put a company in the highest penalty bracket include misleading investigators, bribing public officials and abusing a dominant position, according to a copy of the guidelines.
The tougher penalties come at a time when public and political scrutiny is trained on the ethical standards of big businesses. Regulatory fines have also increased after the financial crisis.
David Green, the director of the Serious Fraud Office, has said he would like to see companies held criminally liable for failing to prevent all kinds of white-collar crime, rather than just bribery, as is currently the case.
Dominic Grieve, the attorney-general, indicated last week that the government is considering Mr Green’s proposal.
“It seems to me that his remarks have considerable force,” Mr Grieve said during questioning in the House of Commons. “In my judgment, this is an area that ought to be looked at and on which there may, indeed, be a degree of consensus across the House. Of course, if we were to do that, we would also have to make sure that such a process operates in a fair and reasonable way.”
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