Serious Fraud Office
We’re defending the UK as a safe place for business
With every technological leap, the nature of global economic crime changes, too. The criminals we investigate move money and information around the world with increasing ease, speed and secrecy. The data explosion also means there’s far more evidence to interrogate. Our labs examine company servers with capacity for 80 terabytes of data — enough to house every UK webpage published in a year. In one case, we saw a phone with 300,000 WhatsApp messages.
Many of those the Serious Fraud Office investigates for complex fraud and bribery are sophisticated and well-resourced and they go to great lengths to hide their actions and distance themselves from the assets they control. Nevertheless, we remain fearless and innovative as we take on the high-risk cases nobody else can.
It’s not just about fighting crime. We defend the UK’s global reputation for openness, its economy and as a beacon for the rule of law. The integrity of Britain as a safe place to do business and invest is critical, especially today when our country is building a new international identity for trade.
The cases we bring to court will always be based on strong evidence. But that does not mean they will always result in convictions. Decisions on guilt are for a jury.
We recently confirmed our investigation into suspected fraud and money laundering in the Gupta Family Group Alliance, including its financing arrangements with Greensill Capital UK Ltd.
A month earlier, GPT, an Airbus subsidiary, pleaded guilty to corruption relating to a Saudi contract and was ordered to pay more than £30 million in costs, a fine and confiscation order.
The governance of modern global companies is often so complicated that the definition of power and control within them is far from clear. This can make identifying responsible individuals challenging or impossible.
In the UK, a company can be convicted of a criminal offence only if an individual or individuals can be defined as the “controlling mind” — those controlling the actions of the company. There is no simple definition. Seniority is relevant but not decisive. Other factors include how the company is legally structured and how authority and decision-making are delegated.
However, present UK law enables bad behaviour because leaders can distance themselves from the actions of their company. And this can result in what I call a dangerous culture of organised irresponsibility.
How do you spot organised irresponsibility? Well, it’s demonstrated in inappropriately heavily delegated decision-making; a lack of record-keeping; responsibility spread across different corporate entities; email trails petering out at board level and a culture at the top of “don’t raise that with me”.
This is our environment. To complain about it would be like a captain complaining about the sea. So we have to adapt.
While we can’t put offending companies behind bars, since 2014 the SFO has had new powers to punish them, deliver justice and compel them to behave better. Under a deferred prosecution agreement, companies must co-operate with the SFO, repay the proceeds of crime, pay a fine and demonstrate changes to prevent further wrongdoing.
These are not get-out-of-jail-free cards or backroom deals. DPAs are transparent, public events under the watchful eye of a senior judge.
The company is charged with a crime, but proceedings are suspended if the agreement is approved by the judge. If the company fails to honour the terms of the DPA, the prosecution can resume.
DPAs encourage offending companies to uphold the law and become good corporate citizens. They can also prevent unnecessary economic damage where a conviction could put the company out of business and destroy jobs.
This type of agreement is not unique to the UK; they have been adopted by the US, France and Canada. Since DPAs were introduced, the SFO has agreed ten with corporates, which have delivered penalties, costs and returned illicit gains worth more than £1.5 billion.
These include a record-breaking global settlement with Airbus after an investigation by the SFO with French and American authorities. Airbus agreed to pay £859 million in the UK for bribery offences, part of a deal worth £3.1 billion.
Each DPA application to a judge contains a statement of facts agreed with the company that lists the offences, any alleged financial gain and an analysis of how the crimes were committed.
DPAs demand full co-operation. In short, companies have to come out with their hands up. They must demonstrate a commitment to rooting out wrongdoing and fulfil all the obligations by a deadline.
Our strategy is paying dividends. As companies learn the lessons from DPAs, compliance and behaviour improves. And, in the four years to 2020, the SFO’s financial impact has tripled. Through fines and other penalties the agency has contributed more than £1.3 billion to the Treasury.
We have a lot worth defending. UK trade is worth £1.1 trillion a year, over half our GDP, and the UK is a global leader in financial services, which contributes over £130 billion to the economy and sustains 1.1 million jobs.
The SFO protects our democratic values by investigating and prosecuting the most complex cases of financial crime, and in doing so we help to shape a world in which open societies and economies can flourish.
Director of the Serious Fraud Office, Lisa Osofsky
This article was originally published as a comment piece in the Times on Wednesday, 30 June 2021.
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