Existing Failure to Prevent Offences
As noted, there currently exist two failure to prevent offences: bribery and facilitation of tax evasion.
The Bribery Act’s corporate offence has been around longer and in reality applies to many more companies than the tax evasion offence. There is little doubt that it has had a great effect on the corporate world, one which the Government would like to see replicated in other spheres.
There have only been a handful of prosecutions for the corporate offence, and only that of Glencore, resolved through a guilty plea, was of any significance. But that is not where the true impact of the offence lies. Rather, it is in the change it has made to companies’ internal practices.
Since the introduction of the corporate offence, the amount of time, money, executive energy and other resources going into anti-bribery compliance by companies of all stripes operating in the UK has increased to a massive degree. This is because of a key feature of the corporate offence, shared by all current and planned failure to report offences. Companies can defend themselves from charges by showing that they had in place “adequate procedures” (in later legislation, this has been revised to “reasonable procedures”) to prevent bribery. The content of such procedures, at a suitably high level, was set out in government publications1.
This expansion of compliance is no accident.
While some may have problems of principle in using the criminal law to change companies’ compliance practices and improve their behaviour, successive governments in the UK have had no such issues. It was the intent of the Bribery Act that fear of being found guilty of so serious a crime would spur companies to change what they were doing, prevention being better than cure (though not always cheaper). At the same time, that would relieve some of the burden on government, by requiring companies to police themselves.
So the new offences, both relating to bribery and tax evasion, led to a large expansion in compliance work, time spent on compliance, money spent one external compliance advisors, and so forth. Companies have evaluated and enhanced their internal policies, which is generally a good thing.
Have the offences reduced the incidence of bribery and tax evasion? That is harder to know, and as far as we can tell, no good studies have been published, but it is to be hoped…
“Since the introduction of the corporate offence, the amount of time, money, executive energy and other resources going into anti-bribery compliance by companies of all stripes operating in the UK has increased to a massive degree. “