Enforcement agencies expect closer cooperation and coordination through 2021 as their efforts to clamp down on global bribery and corruption committed by multinational companies continue.
Speaking at the Society of Corporate Compliance and Ethics’ European conference Monday, Lisa Osofsky, director of the U.K.’s Serious Fraud Office (SFO), and Daniel Kahn, acting chief of the Fraud Section at the U.S. Department of Justice (DOJ), said closer working ties and information sharing between enforcement agencies have resulted in some high-profile cases being settled more quickly and effectively, as well as record fines.
In January 2020, the SFO was part of the ground-breaking deal that saw aerospace company Airbus agree to pay €3.6 billion (U.S. $4 billion) to prosecutors in the United States, United Kingdom, and France. The €991 million (U.S. $1.1 billion) fine apportioned to the United Kingdom is the SFO’s largest penalty under a deferred prosecution agreement (DPA) since the scheme began in 2014.
Meanwhile, the DPA the DOJ reached with financial services firm Goldman Sachs in October that included a $2.9 billion fine saw agencies from 10 countries coordinate their efforts to resolve a five-year bribery scandal. Several of these agencies were based in jurisdictions not traditionally lauded for their willingness to share documents: Luxembourg, Switzerland, Guernsey, and the British Virgin Islands.
“Working with other enforcement agencies is very important if we want to pursue cross-border cases,” said Osofsky. “We have seen that closer cooperation gets results.”
Kahn agreed: “We want to encourage closer cooperation between ourselves and foreign agencies. Improved information sharing and coordination will make prosecuting companies for overseas bribery and corruption much easier in future cases.”
Osofsky added Brexit would have “no impact” on the SFO reaching out to European enforcement agencies to help investigate and prosecute cross-border bribery and corruption cases. “We cooperate with European agencies all the time. Just because the U.K. has left the European Union, we do not expect any difference in the way we work with our European partners,” she said.
Other key takeaways from the discussion include:
1. Osofsky denied that the SFO’s perceived heavy-handedness in trying to compel companies to hand over evidence might have damaged efforts to improve cooperation with those it is investigating.
In February, the U.K.’s Supreme Court ruled unanimously the SFO breached its authority when it attempted to compel U.S. engineering services company KBR—whose British subsidiary is under investigation for possible bribery and corruption offenses—to supply documents held outside the United Kingdom or face criminal sanction under Section 2(3) of the Criminal Justice Act 1987. Rather than using such strongarm tactics, the court said the SFO should have sought to request mutual legal assistance from U.S. authorities—as it has the power to do—to obtain the necessary documents.
Osofsky said the Supreme Court decision “clarified” the arrangements around mutual legal assistance, and so it was “welcome.”
2. COVID-19 disruption is an opportunity for compliance functions to protect their budgets—or even seek to increase them. In fact, it may be dangerous to try to cut budgets or get compliance to do more with less resources.
According to Osofsky, since usual face-to-face audits/site visits can’t be conducted, the need to demonstrate good governance and compliance is probably more important now than ever. She also said while it is unclear what regulators will expect in a post-COVID world, demands for more assurance around compliance may increase (and certainly will not decrease).
3. A new focus of the SFO might be looking at companies that have committed high-level frauds on the back of the pandemic (such as bribing agents to win new contracts or wrongly claiming government relief funds) and have harmed consumers in the process. The DOJ is expected to take a similarly proactive approach.
4. The DOJ is “absolutely exploring” using AI and other new technologies to help with its investigations. According to Kahn, as investigations get more document-intensive, AI can help analyze electronic communications and paperwork more efficiently and help cut down time. “We are obviously looking at ways to improve the way we look through data, and using AI is one of those that can help with our investigations,” he said.