Coming clean about bribery: the self-reporting initiative
International Tubular Services (ITS), an Aberdeen-based engineering firm specialising in providing equipment to the North Sea oil sector, is the second company in Scotland that has avoided a corporate criminal prosecution under the Bribery Act 2010. ITS admitted to corrupt payments pursuant to the anti-bribery self-reporting initiative and received a civil fine of around £170,000 instead of facing criminal charges. The corrupt payments were made by an ITS employee to secure contracts in Kazakhstan and they came to light when ITS was acquired by the Parker Drilling Company last year.
The decision by ITS to self-report could be considered a shrewd move since the self-reporting deadline comes to an end on 30 June 2015, unless extended by the Lord Advocate. After this, companies that have failed to own up to past or present corrupt practices may face more severe penalties.
Pursuant to the self-reporting initiative, ITS reported the corrupt practices to the Crown Office. In general, the Crown “will accept reports from businesses who wish to report the discovery by them of conduct within their organisation which may amount to an offence under the Bribery Act…” A report will be made by the company’s solicitor. The Crown Office will make the decision on commencing a criminal prosecution and they will take into account whether the company has reported itself.
Companies that take the step forward and self-report may be given some breathing space when it comes to prosecutions. For example, there is the possibility of referring the case to the Civil Recovery Unit for a financial settlement instead of pursuing a criminal prosecution, as was the case with ITS. The amount of the civil fine will largely depend on the amount of financial benefit that the company has derived from corrupt practices. In addition to this, Deferred Prosecution Agreements are available for bribery offences in England and Wales. To qualify for leniency the company will have to co-operate in investigations and it must have a plan to prevent corrupt practices in the future which means implementing an anti-bribery policy and training employees about anti-bribery issues.
MacRoberts advises clients on all aspects of bribery compliance and provides anti-bribery training.