Ernst&Young UK Bribery Digest Edition 1 Update

UK Bribery DigestFraud Investigation & Dispute Services

Edition 1 updateJuly 2012

14 UK Bribery Digest — Fraud Investigation & Dispute Services

Contents

1 Introduction

2 Overview of cases in the first half 2012

3 Lessons from our recent work with clients in corruption risk management

4 Other recent matters of note

5 Table of cases

6 Cases in the first half of 2012

8 UK Bribery Digest cases summary table

11 Abbreviations

11 Contacts

1UK Bribery Digest — Fraud Investigation & Dispute Services

Introduction

�� Bribery Digest, examining completed UK bribery and corruption cases. This update covers cases in �� Digest,1 commented on all completed cases from 2008 to December 2011. We will be issuing a full update of the Digest providing a complete record of UK cases to that point in time in the New Year.

As we go to print there hasn’t been the headline corporate prosecution under the Bribery Act that many foretold but there have been some interesting and instructive cases. We pass comment on developments related to anti-bribery and corruption �� While each of them has points of interest, none of these cases have �� a state of complacency about corruption risk. With bodies such as the OECD keeping a close eye on developments in enforcement in the UK (and any lack thereof) it seems unlikely that any complacency will be allowed to continue for too long.

We still await the cases that will shed light on the interpretation �� !�� "��#��$��enforcement agency of the Act, will seek to enforce it, however David Green CB QC, the new Director, has been talking tough. At the Ernst & Young sponsored 6th Annual European Forum on Anti-Corruption on 26th June he told the audience that “In any case where there is a realistic prospect of conviction and it is in the public interest to prosecute, then the SFO will prosecute, whether the defendant is an individual or a corporate”.

%��'�� * �� useful in your work. Please contact any of the anti-bribery and corruption team listed on the back page if you would like to make comment or enter into the debate.

Best regards,

Jonathan Middup Partner, UK Head of Anti-Bribery and Corruption

1 Edition 1 of the Bribery Digest may be accessed at http://www.ey.com/Publication/

vwLUAssets/UK_Bribery_Digest_edition_1_January_2012/$FILE/EY_UK_Bribery_

Digest_edition_1_Jan_2012.pdf

UK Bribery Digest — Fraud Investigation & Dispute Services2 UK Bribery Digest — Fraud Investigation & Dispute Services

All sectors are at riskWhile the global enforcement history indicates that certain sectors (oil and gas, pharmaceuticals and defence) have found themselves especially prone to bribery prosecutions, all sectors are at risk. If there was any lingering doubt about this assertion, then it is surely dispelled by Case 26 in this Digest: if the potato business gives rise to a bribery prosecution, then any sector must be seen as at risk.

Domestic and private sector bribery is also a threatThe focus of commentary during the passage of the Bribery Bill into the Bribery Act and of the subsequent Guidance was on �� It is a timely reminder that all four completed UK prosecutions ��an ancillary action to an older case) concern bribery activities within the UK. Businesses cannot overlook the domestic exposure to corruption.

It is also noteworthy that three of these four cases were about private sector bribery — business to business bribery ��!��needs to be an important consideration in any corruption risk management programme.

�!�� "�� #��$�� and directors The previously highlighted enforcement trend of actions against individuals (including individuals in their roles as directors and ��"��#�� half of 2012 were prosecutions of individuals, with a further 11 individuals being sentenced (prison sentences ranged up to 5 ��"��$��%�� Innospec (see Case 7 in the Digest) whose trial or sentencing is in process but not yet completed at the time of writing (two of whom have pleaded guilty). Thus, a discernable feature of the completed prosecutions is that about half of them involve individual defendants and the other half corporations.

Overview of cases in ��

“The SFO’s current role and purpose is unclear to some and needs restating. I am convinced that the SFO must focus on top level fraud. By that I mean cases which �� 34�� in general and in the City of London in particular; cases which compromise the �� entitled; serious bribery and corruption, both national and international and those other cases which may have a particularly strong public interest dimension, or which represent a striking new species of fraud”

David Green (Director of the SFO) at the 6th Annual European Forum on Anti-Corruption 26th June 2012

Ernst & Young’s Global Fraud Survey: responses relating to briberyOur Global Fraud Survey 20122 has produced encouraging evidence that attitudes towards bribery and corruption are changing in the UK. 4% of UK responses to the survey agreed ��'�� business, this has reduced from 8% of UK responses in 2010. By comparison, global responses in 2012 revealed that 15% �� '�� and 11% of respondents from Western Europe.

Insofar as perceptions of the level of bribery are concerned, 14% of UK respondents in 2012 thought that corrupt practices happen widely in business in this country, but only 2% of UK respondents thought that it is common practice in their sector. As was the case in previous years, the UK perception of levels of bribery and corruption in this country are lower than the average of responses from the rest of the world: 39% of global responses thought that bribery happens often in their country and 12% thought that it is common practice in their sector. However, all of these responses are consistent with our long-standing observation that people are inclined to think of bribery and corruption as something that tends to happen elsewhere — be that another sector or another part of the world.

2 The Global Fraud Survey 2012 may be accessed at http://www.ey.com/Publication/vwLUAssets/Global-Fraud-Survey-a-place-for-integrity-12th-Global-Fraud-Survey/$FILE/EY-12th-GLOBAL-FRAUD-SURVEY.pdf


Lessons from our recent work with clients in corruption risk management

Increased awareness prompting whistleblowing reportsTraining and other awareness raising measures that businesses are putting in place have resulted in increased evidence of whistleblowing reports. This is important for two reasons. Firstly it shows that the awareness raising is effective and that individuals feel comfortable coming forward as a result and secondly it highlights that businesses need to be prepared for increased reports and have a planned response built into the compliance programme.

A side effect of anti-bribery training and awareness has been to bring other misconduct matters to light. A number of our recent �� > ��interest within procurement, with individuals linked either directly or indirectly to suppliers, which followed close on the heels of anti-bribery and corruption training.

Due diligence challenges One of the areas where we experience a high number of questions from business is on the extent of due diligence which is necessary over third parties and in the supply chain. Reactions have ranged from, at one extreme, the development and roll-out of sophisticated due diligence programmes based on risk scoring across all third party relationships to, at the other extreme, businesses which have been paralysed by the perceived complexity of the challenge, resulting in no action being taken at all.

“ As with top level fraud so with bribery and corruption. I want to focus the SFO’s expenditure of blood and treasure on those cases where our impact will be greatest. By doing this the SFO will be making the contribution for which it was designed and which its many supporters rightly expect”

“ The SFO will concentrate on the most serious cases of international bribery and corruption with roots in or connections back to UK plc. We will not be looking to act in a compliance role, nor will we penalise well-run corporates for relatively minor infractions”


“We would welcome a debate as to whether �� rewarded for the information they provide”


Some sectors, such as aerospace and defence, have put forward plans to lodge anti-bribery and corruption credentials with a central repository to address the problem of businesses ��?�� @��

There is no doubt that the requirement for third party due diligence has thrown up some huge challenges but the best programmes we have seen have been pragmatic and heavily risk-based, focusing on the real areas of risk and proportionate measures rather than attempting blanket ‘compliance’.

The Mabey Engineering (Holdings) Limited case (see Case 22 in the Digest) highlights the importance of due diligence to investors as a defence in the event of bribery issues subsequently arising.


Other recent matters of note

Deferred Prosecution AgreementsThe Ministry of Justice is seeking to increase the incentive for businesses to self-report economic crime through the introduction of Deferred Prosecution Agreements (“DPAs”)3. The consultation period on introducing DPAs closes on 9 August 2012. DPAs would potentially have far-reaching impact for business, perhaps making it easier and quicker to resolve bribery cases and opening the door to the scale and nature of settlements we have seen agreed with the US Department of Justice and SEC.

It also states that “compliance [with the Standard] cannot confer immunity from legal obligations”. This understandable caveat highlights that the Standard, like various guidance previously published, requires interpretation in order to be given practical application. The onus therefore remains with the business to assess whether or not it has “adequate procedures”.

Financial services still under close scrutinyIn the last Bribery Digest, we highlighted that regulated businesses need to meet a higher standard and that those regulated by the Financial Services Authority (the FSA) are arguably more exposed for “adequate procedures” type actions, to use Bribery Act terminology. We commented that, in essence, the insurance broker % �� N� �� X��$� in the view of the FSA, gave rise to an unacceptable risk that payments could be used for corrupt purposes.

In March 2012, the FSA published a thematic review of anti-bribery and corruption systems and controls in investment banks (along the lines of its May 2010 review of the commercial insurance �� X��4�� Z

'� \��"!�̂� rules covering bribery and corruption, either before the implementation of the Bribery Act or after

'� `�� @��anti-bribery and corruption (ABAC) risk assessment

'� Management information on ABAC was poor, making it � ��^�� effective oversight

'� j��'�� to monitor the effectiveness of their ABAC controls

'� Firms’ understanding of bribery and corruption was often very limited

'� j�� ^�� parties used to win or retain business

'� j�� $�hospitality and expenses policies, few had processes in place to ensure gifts and expenses in relation to particular clients/projects were reasonable on a cumulative basis

3 The DPA as envisaged in the consultation document is described as follows: a prosecutor would lay but would not immediately proceed with criminal charges against a �� @� �� $�� $�� to prevent future offending.

�%'�%��*� ��management system (ABMS)British Standard 10500 was released in November 2011. The Standard takes into account the requirements of the Bribery Act and internationally recognised good practice, and it is applicable for organisations of all sizes, sectors and �� }�� !��$� in much the same way as companies already do for quality, environmental or health and safety management under other BSI standards. The Standard appears to be gaining some traction, particularly in the construction sector.

As the Standard itself acknowledges, it “… does not purport to include all provisions necessary to prevent bribery” and so cannot be used as a simple checklist for compliance.

“ I will also expand and concentrate our intelligence capability…(by doing that we) will extend our reach and increase self reporting by corporates… a corporate which chooses not to self report can expect little sympathy”



Table of cases

Case name Case reference Date completed Page in Edition 1

Mazhar Majeed, Salman Butt, Mohammed Asif and Mohammed Amir 21 Nov–11 7

*��+�-��!�� 20 Oct–11 7

*��!��/�� 19 Jul–11 7

Willis Limited 18 Jul–11 8

;�!��<��/�� 17 Apr–11 9

Mark Jessop 16 Apr–11 10

Aftab Noor Al-Hassan and Riad El-Taher 15 Feb–11 10

MW Kellogg Limited 14 Feb–11 11

Richard Forsyth, David Mabey and Richard Gledhill (Mabey & Johnson Limited)

13 Feb–11 11

BAE Systems plc 12 Dec–10 12

Weir Group plc 11 Dec–10 14

>��*��!?@�<��/�� " 10 Oct–10 14

!��P��Q�@�� @��@ ��Q�@��#�� Q� Rebecca Hoyle and Sarah Kent (Learning Skills Council)

9 Jun–10 15

V��;��;�!��<��/�� " 8 Apr–10 15

Innospec Limited 7 Mar–10 15

Amec plc 6 Oct–09 17

Mabey & Johnson Limited 5 Sep–09 17

Aon Limited 4 Jan–09 17

Balfour Beatty plc 3 Oct–08 18

Niels Tobiasen and Ananias Tumukunbe (CBRN) 2 Sep–08 19

Dobb White & Co 1 Apr–08 19

Case name Case reference Date completed Page

Andrew Behagg, David Baxter and John Maylam 26 Jun–12 7

Bank of Ireland v Jaffery and Gill 25 May–12 7

James McGeown, William Marks, John Symington and Carol Kealey 24 Mar–12 7

X� ��V��-Q�V�� @�� Q�!��Y�� Z��@�� 23 Jan–12 6

Mabey Engineering (Holdings) Limited 22 Jan–12 6

Covered in this update

Covered in Edition 1 of the UK Bribery Digest


Cases referenced 1 to 21 are set out in Edition 1 of the Bribery Digest. Cases referenced 22 to 26 �� All of the cases are included in the summary table.

22. Mabey Engineering (Holdings) Limited (January 2012)

j� �� \��~��Z� the company itself was prosecuted in September 2009 and three � �� "��N��respectively in the Digest). Mabey & Johnson self-reported the irregularities in early 2008 and, therefore, the matter took four years to be fully resolved. The January 2012 case concerned a civil order requiring the shareholder of Mabey & Johnson (Mabey Engineering (Holdings) Limited)to pay £131,201 in recognition of sums received through share dividends derived from contracts won through unlawful conduct.

In the SFO Press Release, Richard Alderman, the Director of the SFO at that time, stated: “First, shareholders who receive the proceeds of crime can expect civil action against them to recover the money… In this particular case, however, the shareholder was totally unaware of any inappropriate behaviour… The second broader point is that shareholders and investors in companies are obliged to satisfy themselves with the business practices of the companies they invest in. This is very important and we cannot emphasise it enough. It is particularly so for institutional investors who have the knowledge and expertise to do it. The SFO intends to use the civil recovery process to pursue investors who have �� %�� $�� less sympathetic to institutional investors whose due diligence has clearly been lax in this respect.”

The Proceeds of Crime Act (POCA) has featured heavily in earlier cases and offers broad powers to the SFO, especially in dealing with privately held businesses. Proceeding against a publicly owned business and more “passive” investments using this power is likely to be more problematic for the enforcement agency.

The position is rendered yet more complex by the yet-to-be �� !�� N"� ��commercial organisations to prevent bribery by an associated person) — but, of course, this and the earlier cases pre-date the

[��

Act. The Guidance (see paragraph 42) states that liability under the Act will not accrue “through simple corporate ownership or investment or through the payment of dividends” and appears to require a more direct and intentional link between the investor and the bribery.

Because a number of both criminal (e.g. Bribery Act) and civil (e.g. POCA) laws impinge on incidents of bribery, there is a need for sound analysis and advice for investors in managing corruption risk. The SFO’s comment, quoted above, highlights that an investor will be in a more defensible position where adequate due diligence has been performed.

23.�X� ��V��-Q�V�� @�� Q�!��Hammond and Barry Smith (January 2012)

This case highlights a type of corrupt activity that receives less comment but which is potentially of serious consequence: ��

j�� companies acting as procurement agents for the projects in the oil and gas sector. Certain of the defendants were engaged by these procurement agents and had access to information which they passed on (through the other co-defendants or their front companies) to targeted bidding companies who either made, or agreed to make, corrupt payments for the information, disguised as “consultancy services”.

These were established UK-based procurement companies, dealing with some of the larger projects in the sector. Several of the bidders who agreed to pay for the information were in mature economies, such as Italy, France and Canada.

The SFO reports that the procurement companies helped the investigation enormously and were appalled at the apparent blatant disregard shown by the defendants (several of whom ��?��X�� integrity of the project environments.

�� 2011(when the Bribery Act came into force), the procurement and bidding companies are likely to have been exposed to prosecution for the section 7 offence of failing to prevent bribery.


The judge held that Mr Gill had acted dishonestly in procuring Mr Jaffery’s services to assist him in obtaining the loan and that the bank would not have proceeded with the loan had it known that Mr Jaffery had been promised a 10% interest in the project.

26. Andrew Behagg, David Baxter and John Maylam (June 2012)

This UK-based bribery case involved a major supplier of potatoes to Sainsbury’s. It appears to involve many of the classic features and ��>��

Andrew Behagg and David Baxter were the Operations Director and Finance Director respectively of the company, which supplied half of Sainsbury’s potatoes in the UK. John Maylam was a buyer for Sainsbury’s.

The scheme appears to have been straightforward: Sainsbury’s were overcharged for potatoes supplied since 2006 with the excess (some £8.7 million) being accumulated into what was called The Fund. John Maylam and his associates received £4.9 million of The Fund and the remainder was retained by the other defendants.

!��>�� include the following:

'� Lavish hospitality and holidays for John Maylam (including a £200,000 bill at Claridge’s Hotel and a £350,000 holiday to the Monaco Grand Prix) paid from The Fund

'� Some £1.5 million transferred by John Maylam to Luxembourg

'� A “consultancy report” for which he was paid £85,000

'� Large and frequent cash payments to him — the scam was uncovered by an employee of the potato supplier who became suspicious of being asked to withdraw £5,000 in bundles of £50 notes

If there was any lingering doubt that bribery is a risk faced by all sectors, then that doubt is surely dispelled by this case: if the potato business generates a bribery prosecution then any sector must be seen as at risk.

24. James McGeown, William Marks, John Symington and Carol Kealey (March 2012)

This case involved the familiar bribery model of a supplier making �� and continuation of contracts, in this instance CCTV provided to the Ministry of Defence in Northern Ireland. It is another example of a domestic bribery prosecution and in this case both the supplier �� %��bribery can become a family matter: Carol Kealey is the sister of William Marks and became involved by agreeing to use her bank accounts to receive the corrupt monies.

25. Bank of Ireland v Jaffery and Gill (May 2012)

This case is a reminder that bribery allegations may be pursued, in certain circumstances, by way of civil disputes between private parties and that English law takes a broad view of what constitutes a bribe for civil claims where the briber is inducing what he knows to be an agent of another party and there is a failure to disclose it to the other party.

This case was brought by the bank against one of its former senior executives (Syed Jaffery) and one of his associates (Pritpal Gill). Mr Gill was the agent for several of the bank’s customers and the case concerned a series of loans made by the bank to those customers. All of the customers were introduced to the bank by Mr Gill and both defendants admitted that the relevant customers were all ultimately owned by one or other of Mr Gill’s sisters.

The key allegations were that Mr Jaffery acted in breach of his �� > �� Mr Gill dishonestly assisted Mr Jaffery’s breach. Of the various bribery allegations made by the bank, the successful claim concerned a promise made by Mr Gill to Mr Jaffery that he would receive a 10% interest in a project for which a customer connected with Mr Gill was seeking funding from the bank. The judge held that the 10% had been promised as a quid pro quo for Mr Jaffery assisting Mr Gill to obtain banking facilities and that after being promised the interest Mr Jaffery had encouraged the bank to loan money to Mr Gill and his family. The encouragement took the form of promoting the loans and giving references to the bank for Mr Gill and his family.


Case reference Date Name Sector

Enforcement �$��

Enforcement agency Source of enquiry

26 June 2012 Andrew Behagg David Baxter John Maylam

Food retailing 2008 CoLP Audit

25 May 2012 Syed Jaffery Pritpal Gill

Banking

24 March 2012 James McGeown William Marks John Symington Carol Kealey

Government procurement (CCTV contracts)

2002 Ministry of Defence Police (MDP)SFO

Whistleblower

23 January 2012 Andrew Rybak Ronald Saunders Philip Hammond Barry Smith

Oil and gas April 2008 SFO CoLP

Whistleblower

22 January 2012 Mabey Engineering (Holdings) Limited (parent company of Mabey & Johnson Limited)

Engineering(temporary bridges)

January 2007 SFO

21 November 2011 Mazhar Majeed Salman Butt Mohammed Asif Mohammed Amir

Cricket/gambling N/A N/A Press investigation

20 October 2011 Munir Yakub Patel Public service N/A N/A Press investigation

19 July 2011 Macmillan Publishers Limited (MPL) Educational materials December 2009 SFOCoLP

World Bank report

18 July 2011 Willis Limited Wholesale insurance and reinsurance broking

Not known FSA FSA and SARS

17 April 2011 DePuy International Limited Medical goods October 2007 SFO Internal whistleblowerReferred to SFO by DoJ

16 April 2011 Mark Jessop Medical goods 2007 SFO UN Independent Inquiry Committee

15 February 2011 Aftab Noor al-Hassan Oil and gas September 2008 SFO UN Independent Inquiry Committee

15 February 2011 Riad El-Taher Oil and gas August 2008 SFO UN Independent Inquiry Committee

14 February 2011 MW Kellogg Limited (MWKL) Oil and gas October 2009 SFO French prosecutors

13 February 2011 Richard Forsyth David MabeyRichard Gledhill (Re Mabey & Johnson Limited)

Engineering (temporary bridges)

January 2007 SFO

12 December 2010 BAE Systems plc Defence 2004 SFO Investigative journalism

11 December 2010 Weir Group plc Oil and gas services 2004 }��#��Fiscal (Scotland)

UN Independent Inquiry Committee

10 October 2010 Julian Messent (PWS International Limited)

Insurance broking October 2005 SFOCoLP

Foreign and }��#��

9 June 2010 Paul Kent Silinder Singh Sidhu Stuart Ford Rebecca HoyleSarah Kent (Learning Skills Council (LSC))

Government funded training programmes

Not known SFO West Mercia Police

LSC Whistleblower

8 April 2010 Robert Dougall (DuPuy International Limited)

Medical goods Not known SFOWest Yorkshire Police

Internal whistleblowerReferred to SFO by DoJ

7 March 2010 Innospec Limited Chemicals October 2007 SFO UN Independent Inquiry Committee

6 October 2009 AMEC plc Engineering and project management

March 2008 SFO

5 September 2009 Mabey & Johnson Limited Engineering (temporary bridges)

January 2007 SFO

4 January 2009 Aon Limited Insurance broking April 2007 FSA !�� !#}�� and FSA

3 October 2008 Balfour Beatty plc Engineering and construction services

April 2005 SFO

2 September 2008 Niels Tobiasen (CBRN)Ananias Tumukumbe

Security consulting services Not known CoLPCPS

1 April 2008 Shinder Singh Gangar Alan WhiteNigel Heath (Dobb White & Co)

High yield investments April 2006 SFOLeicestershire Police ECU

A separate SFO investigation

UK Bribery Digest cases — Summary table

Self-reported?

Date of transactions Value of transactions Location of transactions Legal basis of actionJanuary 2006 to January 2008

£8.7m UK Criminal: S.1 PCACriminal: S.329 POCA

May 2007 to May 2010

Approx £16m (value of loans) UK } � �Z��

January 1998 to February 2004

£16.2m (value of contracts) UK Criminal: S.1 PCA Criminal: article 47 (2) Proceeds of Crime (Northern Ireland) Order 1996 Criminal: S.89 Police Act 1996

2001 to 2009 Approx £70m (value of contracts) Iran, Egypt, Russia, Singapore and Abu Dhabi (projects)UK, Italy, Canada, France (procurement & bidding)

Criminal: CJA

2001 and 2002 £131k (value of dividends) Iraq Civil: POCA (Part 5)

August 2010 £150k UK Criminal: Conspiracy to corrupt

August 2011 £500 UK S.2 Bribery Act

Yes 2002 to 2009 £11.26m (value of contracts) Rwanda, Uganda and Zambia Civil: POCA (Part 5)

2005 to 2009 £32.7m (net insurance commissions earned)£27m (insurance commissions paid)

“High risk jurisdictions”Egypt, Russia and Argentina cited

Civil: FSMA (Section 206)

1998 to 2006 ��N��X��N�� X

Greece Civil Recovery Order: POCA

2000 to 2003 US$12.3m (value of contracts)€339,886 in improper payments paid or due£40,000 paid in cash in Iraq

Iraq Criminal: The Iraq (United Nations Sanctions) Order 2000

2001 to 2002 3!�� US$1.6m in illegal payments


2001 3!�� US$500k in illegal payments


Yes 1995 to 2004 US$6bn (total value of contracts)3!��N�� X

Nigeria Civil: POCA (Part 5)

2001 and 2002

€4.2m (contract revenues) £420k payments to government


1999 to 2005 US$39.97m (contract value)US$12.4m (payments to intermediaries)

Tanzania Criminal: S.221 Companies Act 1985

2000 to 2002 ��N��X£3m kickbacks

Iraq Civil Recovery Order: POCA (referencing S.221 Companies Act 1985)Criminal: The Iraq (United Nations Sanctions) Order 2000

February 1999 to June 2002

US$1,982,230 as inducements or rewards Costa Rica Criminal: S.1 PCA

June 2003 to August 2005

£1.3m (contract value)£270k kickbacks

UK Criminal: S.1 PCACriminal: S.329(1)(b) POCA (money laundering)Criminal: S.328(1) POCA (acquisition, retention, use or control of criminal property)Criminal: S.16 Theft Act 1968 (pecuniary advantage by deception)

1998 to 2006 ��N��X��N�� X

Greece Criminal: S.1 PCA

1999 to 2006 US$160m (value of contracts)US$11.7m in commissions to agentsUp to US$8m in bribes

Indonesia Criminal: S.1 Criminal Law Act 1977 (conspiracy to corrupt)Criminal: S.1 PCA

Yes 2005 to 2007 US$9m South Korea Civil Recovery Order: POCA (referencing S.221 Companies Act 1985)

Yes 1993 to 2002 Iraq: €4.2m (contract revenues) and £420k payments to governmentJamaica: £8m+ (contract revenues) and £200k �� Ghana: £26m (contract revenues) and £470k ��

Iraq, Jamaica and Ghana Criminal: Conspiracy to corrupt

January 2005 to September 2007

US$7.1m and €1m (revenues arising)66 improper payments totalling US$2.5m and €3.4m to 9 intermediaries

Bahrain,Bulgaria, Myanmar, Bangladesh, Indonesia, Vietnam

Civil: S.206 FSMA

Yes 1998 to 2001 Not known Egypt Civil Recovery Order: POCA (referencing S.221 Companies Act 1985)

May 2007 £500k+ (value of contracts)��

Uganda Criminal: S.1 PCA

Not known US$500k bribe United States Criminal: Conspiracy to corrupt and conspiracy to defraud


Financial penalty �� Other penalties +��

3 years and 6 months imprisonment2 years and 6 months imprisonment4 years imprisonment

Not reported Not reported

3 years imprisonment suspended for 2 years and 7 years � @�� 2 years imprisonment suspended for 2 years9 months imprisonment suspended for 2 yearsConditional discharge

}��

}��

�� @�� as a director3 years and 6 months imprisonment�� @�� as a director12 months imprisonment suspended for 18 months

£131k Dividends received by parent company derived from contracts won by subsidiary through unlawful conduct

£2k in costs

32 months imprisonment30 months imprisonment12 months imprisonment6 months imprisonment

£105k between them in prosecution costs

3 years imprisonment

£11.26m Revenue received from potentially unlawful conduct MPL debarred from World Bank contracts for minimum 3 years SFO approved monitor put in place

MPL pay all investigation costs. MPL pay £27k SFO costs. MPL withdrew from all public tenders in education business in East and West Africa. Loss of bid securities

£6.895m "!�� High standards of regulatory conduct

Willis to carry out a review of past payments to overseas third parties �! �� costs per the FSA

£4.829m Had regard to penalties, settlements and seizures in US and Greece

Depuy pays prosecution costs

£150k Fine — payable to the Development Fund for Iraq 24 weeks custodial sentence Jessop pays prosecution costs of £25k

16 months imprisonment suspended for 2 years

10 months imprisonment

£7.028m �� of parent company derived from contracts obtained by bribery and corruption

MWKL to overhaul its internal audit and control measures MWKL pay costs of investigation

�� @�� as a director�� @�� as a director8 months imprisonment suspended for 2 years

£75k of prosecution costs

£125k of prosecution costs

£500k£29.5m

Fine��?�� of Tanzania

£225k in SFO costs

Remediation as set out in the Report of Lord Woolf

£13,945,962£3m

��Fine

£100k Compensation to the Republic of Costa Rica �� @�� as a director

4.5 years imprisonment3 years imprisonment2 years imprisonment1 year imprisonment suspended for 2 years12 months imprisonment suspended for 2 years and 200 hours unpaid work and 12 month supervision order

12 months prison term suspended for 2 years on appeal

US$6.7mUS$6m

}�� Civil recovery of which US$5m to UN Development Fund for Iraq (penalties taking into account the ability to pay)

SFO appointed monitor `�� or compensation Innospec to pay costs of a monitor for up to three years

£4.95m Contribution to costs of the Civil Recovery Order External consultant appointed

Iraq £2mJamaica £750kGhana £750k

FineFineFine

Iraq reparations £618kJamaica reparations £139kGhana reparations £658k}��

First year monitoring costs up to £250kSFO costs £350k

£5.25m

£2.25m Not known Contribution to costs of the Civil Recovery Order External monitor appointed

5 months jail sentence suspended for a year1 year jail sentence; subsequently deported

18 months jail sentence for corruption and 6 years for fraud18 months jail sentence for corruption and 6 years for fraud6 months jail sentence

11 11

Abbreviations

Bribery Act Bribery Act 2010

CoLP City of London Police

CJA Criminal Justice Act 1987

CPS Crown Prosecution Service

CRO Civil Recovery Order

DoJ US Department of Justice

ECU Economic Crime Unit

FBI Federal Bureau of Investigation

"�#� "�� #��

FSA Financial Services Authority

FSMA Financial Services and Markets Act

Guidance The Bribery Act 2010 Guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing (Ministry of Justice)

PCA Prevention of Corruption Act 1906

POCA Proceeds of Crime Act 2002

SAR Suspicious Activity Report

SEC Securities and Exchange Commission

!"#� !�� "��#��

SOCA Serious Organised Crime Agency

UK Bribery Digest — Fraud Investigation & Dispute Services

Fraud Investigation & Dispute Services

John Smart +44 (0) 20 7951 3401

[email protected]

Jonathan Middup +44 (0) 121 535 2104

[email protected]

Steve Caine +44 (0) 20 7951 4433

[email protected]

David Lister +44 (0) 131 777 2308

[email protected]

Contacts

“Corporates should be genuinely working towards a zero tolerance (in relation to) facilitation payments. Supported by OECD policy, we will actively consider prosecution where there is plainly no intention of ceasing such payments”


12

Disclaimer

The factual content of this Digest is based on published sources. We provide comment based on our understanding as forensic accountants of the relevant laws and related guidance. This does not comprise legal analysis or advice.

Ernst & Young

Assurance | Tax | Transactions | Advisory

About Ernst & YoungErnst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com.

© 2012 EYGM Limited. All Rights Reserved.

In line with Ernst & Young’s commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content.

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.

The opinions of third parties set out in this publication are not necessarily the opinions of the global Ernst & Young organization or its member firms. Moreover, they should be viewed in the context of the time they were expressed.

www.ey.com

Ernst&Young UK Bribery Digest Edition 1 Update

Documents

Transcript of Ernst&Young UK Bribery Digest Edition 1 Update