Falling foul?

In August 2013, the UK’s Serious Fraud Office (SFO) began investigating a £23 million (US$38 million) fraud at Sustainable AgroEnergy, a company selling biofuel investment products involving jatropha tree plantations in Southeast Asia. This was the SFO’s first investigation under the UK’s Bribery Act 2010, which came into force in July 2011. Since then, the SFO has launched inquiries into several companies including Gyrus Group, a UK subsidiary of Olympus Corporation, and its parent, for “misleading, false or deceptive” accounts; Rolls-Royce, for alleged acts of bribery and corruption; and Eurasian Natural Resources Corporation and its subsidiaries in Africa and Kazakhstan for alleged fraud and corruption. No one denies the SFO’s determination in probing and stamping out corrupt practices, but many have questioned its relative quietness since the introduction of the Bribery Act, especially given the act’s extraterritorial reach. Section 7 makes UK companies with a presence overseas, and international companies with a UK presence, liable for a failure to prevent bribery.

“The current section 7 offence – which creates a form of ‘strict’ corporate liability for bribery which never existed prior to the enactment of the Bribery Act 2010 – is a powerful weapon in the SFO’s arsenal,” says Aaron Stephens, a partner in the corporate crime and investigations department at Berwin Leighton Paisner.