The Serious Fraud Office (SFO) recently tried to reinvigorate activity around the Bribery Act warning companies and banks that if they fail to prevent financial crime by their staff, they could face great fines and official blacklisting from European contracts. This proposed amendment put forward by the SFO would give Britain powers to take direct action against corporates, enabling it to levy US-style fines and brand them with assisted bribery.

 

This is not the first time the Government has tried to scaremonger organisations into taking action, and firms should take it very seriously. These developments can be seen as both a carrot and stick, however.  The stick: organisations in the UK found guilty of offences under the Bribery Act could find themselves blacklisted from European contracts; the carrot: deferred prosecution agreements (DPAs) that the SFO stated they could use as of 24 February of this year.

Undoubtedly, the SFO will look to reinforce these messages by publicly taking action in both regards.  To really hammer home the message, the SFO could showcase two cases side-side, one under a DPA and the other in the form of a traditional prosecution, to show the benefits of companies entering into DPAs.

 

Recognising the warning signs

 

To avoid the attentions of the SFO altogether, organisations must ensure that they have adequate procedures in place.  Until now, these have primarily been seen as a defence mechanism and best-practice for bribery avoidance. All firms clearly need to implement a mixture of good policies, procedures and training, yet it is worth noting that there are processes available as well.

 

In many cases involving bribery, corruption and other similar offences, for example, there are signs of the deviant behaviour hidden within the vast quantities of data that passes through or is stored on the company’s technical infrastructure.  An intelligent analysis of this information can often provide remarkable insights and early warning signs for these issues.

 

Bribery process weak-points

 

Analysis typically revolves around two key weaknesses in the bribery process, the first being that there is generally some need to communicate, either between the perpetrators and their associates, or internally to deal with internal queries around unusual activities.  The second weakness is that money has to leave an organisation’s accounts, however well disguised, as the perpetrators do not generally use their own assets when funding a bribe.  Both of these weaknesses can be intelligently targeted.  

 

Communications are normally not maintained over the corporate email system, at least in respect to communications with external perpetrators.  However, corporate systems including instant messaging or chat systems should not be ignored totally.  They can provide a wealth of intelligence when it comes to spotting the peripheral signs of these actions, such as internal queries about payments or comments on behaviour or results.  Chat systems are particularly valuable as people tend to use these in the same way they would a phone-call, which means they are often less cautious about what is said and how it is said.

 

The help of technology

 

Analysing internal systems alone is not enough.  Technology is continually developing there are a wide range of communication mediums that can be used, including web-based email accounts, social-media messaging (e.g. Facebook and Linked In) and Skype.  It is important to consider other legal constraints before engaging in a full-scale investigation into these, for example Data Protection and Human Rights legislation.  

 

However, given the appropriate circumstances and legal footing, these mediums can be thoroughly analysed looking for both patterns of communication and also the actual content of the communication itself. Often both of these mediums create vast volumes of data that needs to be carefully investigated in order to identify potential warning signs.  

 

A preventative approach

 

Whether these investigations are undertaken as part of regular internal audits seeking to identify issues before they come to the surface, or in response to other suspicions, they can help an organisation avoid large fines, unwarranted bad publicity and now being blacklisted for European contracts.  Rather than the ongoing fines, a preventative approach should be taken by firms to protect potential reputational and financial damage to their business. Implementing the right systems needs to be a priority for firms so that they can stop any suspicions before they rise to the surface.  Currently, this is not something that many firms are doing well.