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Legal Update

Potential impact in the UK of greater incentives in the US to self-disclose bribery of foreign officials

12 April 2016
Mayer Brown Legal Update

The United States Department of Justice ("DOJ") has announced a one-year pilot programme intended to incentivise companies to self-disclose offences under the US Foreign and Corrupt Practices Act ("FCPA") of overseas bribery of a foreign official. If companies self-disclose they will be eligible for a wide range of incentives – the DOJ says it will even consider declining to prosecute.

In the UK the Serious Fraud Office ("SFO") can offer a Deferred Prosecution Agreement ("DPA") to companies which self-disclose offences – but the incentives for self-disclosing in the UK are nowhere near as generous as those being offered by the DOJ in its pilot programme. As a result the success of this pilot will be keenly watched on this side of the Atlantic to determine if similar steps should be taken in the UK.

The DOJ pilot programme
The DOJ has issued guidelines on plea agreements with companies since 1999. The new pilot programme complements the DOJ's recent Yates memo, where companies have to disclose information on employees who were involved in any offence in order to get any credit – now that potential credit in respect of FCPA offences is clear to companies.

Under the new pilot those companies that self-disclose an FCPA offence to the DOJ will be eligible to enter into a plea agreement with a reduction of any fine of up to 50% below the low end of applicable range of fines, plus the DOJ will generally not require appointment of a monitor. It may even decline to prosecute. However the company must fully cooperate with the DOJ (including providing information on employees) and, where appropriate, remediate flaws in its controls and compliance programme. These are high hurdles for a company to clear before it is eligible to benefit from the pilot programme.

The UK DPA regime
In the UK DPAs have only been part of UK law since 2014, and only companies can enter into one. Only the SFO can offer a DPA and the DPA must be approved by the Court as being "fair, reasonable and proportionate". The company will still be liable for the punishment it would have been had the SFO pursued a successful prosecution against it, including disgorgement of profit, payment of the SFO's costs, remediation of any flaws in control and compliance policies and potentially the appointment of a monitor. Crucially, the legislation governing the DPA regime states that the company must also pay a penalty which is "broadly comparable to the fine a court would have imposed" following a guilty plea – therefore it is not currently open to the SFO to offer (and the Court to approve) the reduction of a fine on the same scale as the DOJ in the pilot programme.

The impact of the DOJ pilot programme on the UK DPA regime
The DOJ's pilot programme suggests a lack of companies self-disclosing offences in the US, which is reflected in the UK (albeit the UK's DPA regime has been in place for a much shorter period of time). Therefore the success or otherwise of the pilot scheme will be keenly watched in the UK. However if the DPA regime is to be altered to permit reductions in any fine for self-disclosing, this will require amending the underlying legislation.


  • Alistair Graham
    T +44 20 3130 3800
  • Chris Roberts
    T +44 20 3130 3543

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