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On November 30, the United Kingdom’s Serious Fraud Office (SFO) announced the successful conclusion of the deferred prosecution agreement entered into in 2015 with Standard Bank PLC, which had followed allegations that payments were made by two former employees to bribe members of the Tanzanian government. This deferred prosecution agreement was the first ever entered into by the SFO and also marked the first use of Section 7 of the Bribery Act of 2010—failure of commercial organizations to prevent bribery—by any U.K. prosecutor. Upon entering into the deferred prosecution agreement in 2015, Standard Bank had also settled related charges with the SEC. See previous Scorecard coverage here.
The DPA required Standard Bank to pay fines and disgorgement totaling almost $26 million, pay an additional $6 million to compensate the government of Tanzania, and hire an external compliance consultant. On the basis that Standard Bank had fully complied with the terms of the agreement, the SFO announced that it had advised the relevant UK court that it will conclude the DPA without restarting proceedings against the bank. The SFO’s announcement also promised that a “Details of Compliance” document outlining how Standard Bank met the terms of the deferred prosecution agreement would be published on the SFO’s website in the future. Because this is the SFO’s first deferred prosecution agreement, this document could be very useful guidance for companies to understand what measures will be expected to satisfy the SFO.
According to the U.K Serious Fraud Office (SFO), the former CEO and CFO of Afren, Plc., an oil and gas exploration and production company, were sentenced in the UK on October 29 for their parts in a kickback scheme in Nigeria. The former CEO was sentenced to up to six years in prison, and the CFO to up to five years. The executives, Osman Shahenshah and Shahid Ullah, were found to have recommended that Afren enter a $300 million deal with an oil field partner in Nigeria without telling the company’s Board that they would personally receive 15% of the deal’s value from the partner. They then laundered more than $45 million, using some of the proceeds to buy luxury Caribbean real estate. The SFO thanked the U.S. DOJ for its assistance with the investigation.
In what the UK’s Serious Fraud Office (SFO) is calling a first, a £4.4 million recovery from a corruption case will be returned overseas. The SFO prevailed in a trial before the UK High Court and recovered the money from Chadian diplomats, including the wife of the former Deputy Chief of the Chadian Embassy to the United States who was received the money in the form of discounted shares of Canadian oil company Griffiths Energy International, Inc. Griffiths also paid “consultancy fees” to diplomats through a front company called “Chad Oil” set up five days before the agreements with the diplomats. In exchange for the payments, Griffiths received exclusive development rights in Chad.
The case has continued for some time—Griffiths paid a C$10 million criminal fine in Canada in 2013. After Griffiths was taken over by a UK corporation, the U.S. DOJ filed an In Rem. complaint and later requested SFO assistance.
This recovery will be “transferred to the Department for International Development who will identify key projects to invest in that will benefit the poorest in Chad.”
On January 18, the Serious Fraud Office (“SFO”) confirmed the opening of an investigation of Chemring Group PLC (“Chemring”) and its subsidiary, Chemring Technology Solutions Limited (“CTSL”) into alleged bribery, corruption, and money laundering. Chemring, a UK-based company that designs and makes products in the aerospace and defense industries, stated that the investigation followed a voluntary report from CTSL relating to “two specific historic contracts.” According to Chemring, the first of these contracts was awarded before the company took over the business group being investigated, while the second contract occurred after the acquisition. Chemring stated that the company will fully cooperate with the SFO’s investigation and provide further updates.
On September 15, F.H. Bertling Ltd., a logistics and shipping company, and six of its current and former directors pleaded guilty in the U.K. to charges of conspiracy to pay bribes in Angola. The trial against a seventh man charged in the conspiracy started this week in London. The U.K.’s Serious Fraud Office charged the company and the seven individuals last year with allegedly paying bribes when F.H. Bertling was seeking to obtain freight forwarding services contracts with the Angolan state oil company, Sonangol, between January 2005 and December 2006.
In a September 4 speech, Serious Fraud Office (SFO) Director David Green urged the SFO to lead anti-corruption enforcement efforts against UK-connected companies, warning that “if we take our foot off the pedal . . . , others will fill the void.” Green noted that the DOJ “is not shy about enforcing the [FCPA] against foreign companies,” and emphasized that seven of the top ten highest-dollar FCPA cases since 2008 were brought against non-American companies. Green said that “it is surely right that the UK should lead enforcement in relation to UK companies or companies with strong connections here,” because it not only “demonstrates our commitment to the level playing field,” but it also “ensures that hefty financial penalties go to UK public coffers rather than elsewhere.”
On May 11, following a five-week trial in a London court, a former manager of Securency PTY Ltd (Securency) was convicted of four counts of making corrupt payments to a foreign official in violation of the Prevention of Corruption Act 1906. Peter Chapman, the former manager of the polymer banknote manufacturers Africa office, was acquitted on two other counts. Chapman was convicted of bribing an agent of Nigerian Security Printing and Mining PLC in order to secure contracts for the purchase of reams of polymer substrate from Securency. The total amount of bribes to the agent equaled approximately $205,000. On May 12, he was sentenced to two and a half years (30 months on each convicted count, to be served concurrently). The UK Serious Fraud Office (SFO) prosecuted the case following a joint investigation by the SFO and the Australian Federal Police, which initiated the investigation in May 2009.
On March 29, the UK Serious Fraud Office charged another Alstom S.A. employee, Terence Stuart Watson, in its ongoing corruption investigation of the beleaguered French power and transportation company. The SFO has previously charged 6 other individuals in this investigation. The charges against Watson, the Alstom Country President for the UK and Managing Director of Alstom Transport UK & Ireland, are related to alleged bribery in Hungary concerning the companys supply of trains to the Budapest Metro between 2003 and 2008. The SFOs prior charges have involved alleged corruption spanning Hungary, India, Poland, and Tunisia, and included charges against the former Senior Vice President of Ethics and Compliance related to alleged bribery in Hungary. In late 2014, the company pleaded guilty to FCPA charges brought by the US Department of Justice, and agreed to pay a record $772 million fine to resolve those charges.
Following its December guilty plea in the UK, global building and infrastructure company Sweett Group on Friday was ordered by a UK court to pay £2.25 million (including a fine of £1.4 million) for violating Section 7 of the UK Bribery Act of 2010. This was the first-ever conviction and sentence for a company under Section 7, which in essence penalizes companies for failing to prevent bribes made on their behalf. The conduct at issue related to a three-year arrangement in the UAE to secure contracts related to large building contracts. Prior FCPA Scorecard coverage is also available.
On January 8, the United Kingdoms Serious Fraud Office announced that Smith and Ouzman Ltd, a printing company specializing in official documents such as election ballots, was ordered to pay penalties totaling £2.2 million following its 2014 conviction under the Prevention of Corruption Act 1906. The SFOs announcement regarding the sentencing stated that its investigation began in 2010 and centered on £395,074 in corrupt payments made to foreign officials in Kenya and Mauritania. Two of the companys former employees, also convicted in connection with the same investigation, were ordered to pay penalties totaling over £20,000.