If bribery has been discovered in your organization, there are a number of related offenses that you need to watch out for, in particular money laundering. Companies discovering additional offenses, such as money laundering, must follow supplementary steps and procedures. In this alert, our lawyers provide their thoughts on the most commonly occurring related offenses and the steps that organizations should consider taking.
This is the sixth and final alert in the From the FCPA to the UK Bribery Act – Your key questions about global anticorruption laws answered series. Over the last few weeks, members of our global regulatory & investigations team have been answering your most important questions about anticorruption laws in the U.S., UK, France, Germany and Greece.
View from the United States
Books and records and internal controls violations under the FCPA
- The Foreign Corrupt Practices Act (FCPA) not only prohibits bribery of foreign officials; it also requires that issuers: (a) keep books and records that accurately reflect company transactions and uses of assets; and (b) maintain a system of internal controls sufficient for management to maintain control over assets.
- Bribery is often accompanied by falsification of books and records (such as booking illegal payments as commissions or travel expenses).
Violation of other laws
- Tax violations – for example, company deduction of bribes as legitimate expenses;
- Mail or wire fraud – schemes to defraud victims of money using interstate wire communications or U.S. mail
- Travel Act violations – using interstate or foreign commerce or U.S. mail to carry out, or distribute proceeds from, unlawful activity;
- Money laundering – conducting financial transactions with the proceeds of unlawful activity and certain bad intent, such as to conceal the true ownership of the funds or evade taxes;
- Securities fraud – materially false or misleading statements in periodic financial reports; and
- Other violations of truthful reporting requirements – for example, International Traffic in Arms Regulations fee and commission reporting
View from the UK
- Bribery can also give rise to liability for money laundering offenses. Under the Proceeds of Crime Act 2002 (POCA), it is an offense to deal with, handle or become concerned in arrangements involving, criminal property.
- For the purposes of POCA:
- “property” is very widely defined and includes money and all forms of property wherever situated.
- property is “criminal property” if it constitutes or represents a person’s benefit from criminal conduct and the person knows or suspects that to be the case.
- The benefits of bribery could therefore be criminal property for the purposes of POCA, and a corporate which knows or suspects that it is handling or dealing with such benefits would need to make an authorized disclosure to avoid liability.
- Accordingly, even if a corporate does not self-report in relation to liability under the UK Bribery Act, it may need to consider disclosure under POCA. There are separate offenses relating to failure to report money laundering for those working in the regulated sector.