Last week the Serious Fraud Office (SFO) announced the end of the UK's first Deferred Prosecution Agreement (DPA) with Standard Bank. A DPA is an agreement reached between a prosecutor and an organisation which could be prosecuted, which suspends prosecution for a defined period as long as the organisation meets certain specified conditions.
Standard bank entered into a DPA with the SFO on 30 November 2015 with a 3 year term, after it was alleged that Standard Bank had failed to prevent its associated persons from committing bribery offences. Under the terms of Standard Bank's DPA, it was required to (i) pay a financial penalty of 16.8 million USD in fines, and 8.4 million USD in disgorgement of profits to the UK Treasury (ii) pay 6 million USD in compensation and over 1 million USD in interest to the Government of Tanzania (iii) pay the SFO's costs of £330,000.
As part of the DPA's terms, Standard Bank was required to cooperate fully with the SFO and other authorities investigating the bribes, including disclosing information and material relating to the activities of individuals involved. Standard Bank had to engage an external consultant to report on its anti-bribery and corruption controls, policies and procedures. PWC were commissioned to conduct this review, and make recommendations. PWC was then to verify Standard Bank's implementation of the compliance procedures and provide regular reports to the SFO.
While this DPA may be the first one to come to an end, since the introduction of DPAs in 2014, the SFO has entered into four of them, which have garnered more than £670 million of financial penalties. Most notably, last year's DPA with Rolls-Royce. That DPA was also of interest as it was offered by the SFO in circumstances where Rolls-Royce had not self-reported its wrongdoing (albeit that it offered "extraordinary cooperation" after the SFO commenced its investigation).
The successful conclusion of the DPA with Standard Bank demonstrates their real potential value to businesses. Organisations faced with prosecution for corporate offences can see that it is possible to mitigate uncertain outcomes and timescales by cooperating with investigations, securing DPAs, and emerging after a period with the risk of prosecution eradicated. The recent decision in the ENRC case, which re-affirmed privilege attaching to internal investigations, will facilitate interactions between businesses and the SFO, and should further enhance the attractiveness of the DPA regime.