Clifford Chance

The UK Serious Fraud Office ("SFO") has published revised Corporate Co-operation guidance ("the Guidance") aimed at encouraging corporate organisations to proactively self-report suspected fraud, bribery and corruption.

What is the significance of the Guidance?

When deciding whether to prosecute a corporate organisation or alternatively whether the case will be suitable for a deferred prosecution agreement ("DPA"), the key test for the SFO under the Code of Practice issued in connection with DPAs ("the DPA Code") is whether that corporate organisation has demonstrated a "genuinely proactive" approach to co-operation justifying a negotiated settlement.

The Guidance is a key document used by the SFO (alongside the DPA Code, the Code for Crown Prosecutors and separate guidance on corporate prosecutions produced jointly with the Crown Prosecution Service) when it is deciding if this requirement has been satisfied.

Headline points

• Will a DPA always be available to corporate organisations which self-report? – The new version of the Guidance confirms that negotiations with a view to a DPA will be offered to corporates which self-report promptly to the SFO and co-operate fully "unless exceptional circumstances apply". This still leaves some room for manoeuvre for the SFO as to whether to commence or continue DPA negotiations with co-operating corporates. The Guidance specifically calls out factors which the SFO will consider to be markers of a lack of co-operation (namely attempts at "forum shopping" by approaching other authorities rather than it, efforts to obfuscate or minimise the role of individuals or taking a tactical approach to providing information, whether through delay or deluging the SFO with excessive volumes of material). However, even with these reservations, the Guidance is the clearest indication given to date that corporate organisations may have a reasonable expectation that self-reporting will provide a basis for a negotiated settlement. Consistent with some cases in which DPAs have been offered and concluded to date, the Guidance does not rule out a DPA in cases where corporates have not self-reported.
• Must corporate organisations waive legal professional privilege in order to be deemed to have co-operated? – The SFO has slightly shifted its position on privilege. In previous versions of the Guidance, it took a completely neutral stance, carefully stating that corporate organisations deciding not to waive privilege would not be penalised, but would not satisfy the relevant public interest factor against prosecution. It now states, more positively, that it "considers a waiver of legal professional privilege to be a significant co-operative act [that] can help expedite matters". In addition, it indicates in terms that in cases where privileged records of interviews with witnesses have been generated, a voluntary waiver of privilege in respect of those documents will be a factor" weighing strongly in favour of co-operation".
• Can corporate organisations investigate suspected wrongdoing before self-reporting? - The Guidance acknowledges to a greater extent than in previous versions that it will often be necessary for initial investigative work to be done by corporates considering whether to self-report in order for them to establish if there has been corporate offending, although (unsurprisingly) it does not prescribe periods within which such work should be completed and matters reported to it.
• How involved should corporate organisations expect the SFO to be in internal investigations? - The Guidance requires organisations, in order to be deemed sufficiently co-operative, to conduct internal investigations in consultation with the SFO, ensuring that these do not interfere with the SFO's own investigations. It now more clearly indicates that the SFO will expect to be told in advance about, and to have an opportunity to object to steps proposed to be taken as part of internal investigations. It places particular importance on notifying intentions to conduct internal interviews and on refraining from interviewing individuals to whom the SFO may wish to speak first.
• What does the Guidance say about the practicalities of self-reporting? – This version of the Guidance strikes a more practical and somewhat less antagonistic tone than previous versions. It acknowledges that the subject matter of self-reports will often trigger other legal and regulatory obligations. It addresses some practical points which can arise for self-reporting entities by confirming that regulatory notifications (e.g. to the FCA under Principle 11) and Suspicious Activity Reports filed where the conduct being reported may also have amounted to the commission of money laundering offences do not amount to self-reports, and that such notifications should be made simultaneously with a self-report to the SFO. Reflecting public statements that it wishes to conclude investigations as efficiently as possible, it also includes some indicative and non-binding targets for the SFO. Specifically, it indicates that the SFO should contact a corporate within 48 business hours of a self-report, should keep corporates updated throughout assessments by it of matters reported (although no specific timeframe is given for this), should make decisions about whether investigations are to be commenced based upon self-reports within six months and should complete DPA negotiations within six months of an invitation being extended.