Slim pickings for bribery enforcement despite evidence that more companies are involved in corruption

Ernst & Young believes that the Serious Fraud Office is signaling a tougher regime for 2013. Though not prosecuted under the Bribery Act, the cases completed in the past year provide lessons and warnings to companies on how they may be targeted under the new regime. Agents and intermediaries committing illegal acts in a company's name top the list of risk areas whilst certain industries – oil and gas, construction, publishing and retail - have been in the spotlight.

Samantha des Forges, Senior Manager leading Fraud Investigation & Dispute Services (FIDS) in the Channel Islands said: “The SFO is signaling a tougher stance after its recent travails. Its responses include looking to invest more heavily in intelligence and clarifying that its primary role is not to advise companies, but to prosecute.”

“The extra territorial provisions of the UK Bribery Act have the potential to impact both Channel Islands based businesses and individuals with a close connection to the UK. In addition, there are existing local legal and regulatory considerations with regard to bribery and corruption risk. With this in mind, Channel Island businesses need to be aware of these risks and need to be acting to mitigate them now,” she said.


In Scotland, a company acquired a bribery exposure as part of its acquisition of another business and in a further case; the sale of confidential information was highlighted as a corrupt activity that is likely to be treated seriously under the new regime.


Only eight completed cases of bribery and corruption have been completed in the UK in the past year, yielding penalties of less than £8million despite indications that bribery and corruption has risen during the economic downturn.

According to Ernst & Young's UK Bribery Digest, which reviews completed bribery and corruption cases, there were four cases involving the Serious Fraud Office in the past year (two criminal and two civil settlements) while the Scottish authorities also completed one case, and there were three others involving one private litigation. No prosecutions against businesses have yet been made under the Bribery Act – despite the law coming into force 18 months ago.

These findings come despite indications from Ernst & Young's Global Fraud Survey that bribery and corruption has risen over recent years, with 15% of executives saying they would contemplate unscrupulous behaviour including providing personal gifts or cash to secure business. The survey of over 1700 CFOs, heads of legal, compliance and internal audit, also showed that the numbers who felt that providing personal gifts to secure business could be justified more than doubled in two years.

This trend is echoed in the experience of Ernst & Young's UK Fraud Investigation & Dispute Services team, who continue to investigate an increasing number of bribery and corruption issues in 2012 and 2013 on behalf of their clients.

Jonathan Middup, Fraud Investigation & Dispute Partner and UK leader of Anti-Bribery and Corruption services said: “There has been much talk about a tough regime for bribery enforcement, but the scale and nature of cases mean that businesses have little evidence to back this up at the moment. In particular, it continues to be a point of debate that there have still been no corporate Bribery Act cases 18 months after the legislation came into force. Businesses feel that an artificial war is being fought at the moment.”

This is despite survey results and Ernst & Young's experience that more bribery and corruption issues are surfacing in the economic downturn.”

“However, the SFO has said it has 11 active bribery and corruption cases and a further 18 under consideration. Given that we are also assisting with a number of issues on behalf of clients we expect that corporate Bribery Act cases will be brought into the public arena this year. Organisations would be unwise to hold back on their compliance programmes just because the courts are currently quiet.”

“The best reaction for a business is to be ready to demonstrate a robust compliance programme evidencing a proportionate, practical anti-corruption framework in case the SFO should call. Local businesses should seek to reinvigorate their commitment to provide appropriate anti-fraud and anti-bribery training, processes and structures,” Ms des Forges concluded.