Britain's Serious Fraud Office has published new guidance today that includes tougher standards for when a company may be prosecuted under the U.K. Bribery Act.

The guidance issued Oct. 9 covers the SFO's latest enforcement approach toward facilitation payments, gifts and hospitality, and self-reporting.

SFO Director David Green said the latest changes have been made for three important reasons:

To restate the SFO's primary role as an investigator and prosecutor of serious and/or complex fraud, including corruption;

To ensure there is consistency with the approach of other prosecuting bodies; and

Take forward certain recommendations by the OECD Working Group on Bribery.

Under the new guidance, the SFO said it will prosecute facilitation payments “if on the evidence there is a realistic prospect of conviction” and if “it is in the public interest to do so.” That revision marks a significant departure from previous guidance in which the SFO reassured companies in earlier guidance it would not prosecute companies for facilitation payments if they followed certain procedures, such as having relevant policies in place.

The SFO, however, reassures companies that, “it would be wrong to say there is no flexibility.”  Whether the SFO decides to prosecute in relation to facilitation payments will depend on the seriousness or complexity of the case, and whether there is an offender that should be prosecuted, the agency stated.

The SFO's new corporate hospitality test for whether to prosecute a company similarly rests on whether there is “a realistic prospect of conviction.  Previously, the SFO assured companies it would first take into account certain factors before deciding whether to prosecute, such as whether the company has policies around entertaining, whether the expenditure is proportionate, and how the company recorded the expenditure.

In its revised guidance, the SFO also reassures companies that under its new policy, “bona fide hospitality or promotional or other legitimate business expenditure is recognized as an established and important part of doing business.” It adds the caveat, however, that "bribes are sometimes disguised as legitimate business expenditures."

The SFO also revised its guidance on self-reporting corruption. The SFO previously stated that companies could face civil, rather than criminal, penalties if they voluntarily reported wrongdoing.

The revised rules are far clearer: “Self-reporting is no guarantee that a prosecution will not follow. Each case will turn on its own facts.”

The revised guidance has immediate effect and supersedes any statement of policy or practice on business expenditure previously made by or on behalf of the SFO.

A client alert from law firm Duane Morris warns: “Given the new Act's tough penalties and the apparent ambiguity surrounding the consequences of self-disclosure, businesses may want to take extra care to comply with its provisions. Accordingly, businesses should consider seeking the advice of legal counsel in navigating this statute and its attendant revisions.”

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