Last month the FSA fined UK insurance broker Willis Limited £6.895 million for failings specifically related to their anti-bribery and corruption systems. Payments of £27 million were made to third parties overseas who assisted Willis in winning and retaining business in those jurisdictions; the FSA found these payments were subject to an 'unacceptable risk' of being used corruptly.
This is the biggest fine to date by the FSA in relation to financial crime systems and controls. The fine would have been £9.85 million but was reduced by 30% due to Willis' co-operation and a settlement being agreed at an early stage.
Relationships with overseas third parties were criticised by the FSA due to a weak control environment, failures in relation to there being an adequate commercial rationale for these relationships and inadequate due diligence being conducted, failures to ensure staff correctly implemented anti-corruption policies and senior management receiving insufficient information to be able to assess whether bribery and corruption risks were being adequately mitigated.
The period in question ran from 2005 - 2009 and so Willis escaped the wrath of the Bribery Act. The strict liability commercial offence contained within s7 of the Bribery Act places obligations on corporate organisations to ensure that they deploy robust anti-corruption procedures. A company in a similar situation now would fall foul of this provision and would likely be the subject of criminal charges under s7 of the Act.
If adequate anti-corruption procedures are established, they will form a defence under s7(2); if not, this can result in unlimited fines and personal liability (including custodial sentences) for a company's directors.
The FSA commented that 'it is vital for firms not only to put in place appropriate anti-bribery and corruption systems and controls but also to ensure that those systems are adequately monitored and implemented'. This echoes the Government's stance and is good advice for any business which wants to avoid penalties under the Bribery Act. For further advice on The Bribery Act, preventing bribery in a business or if you have been accused of bribery offences, please don't hesitate to contact me or a member of our fraud and business crime team.