SFO publishes new guidance for corporates on co-operation and enforcement

The SFO has published new Guidance¹ on its key considerations when determining whether to charge a corporate with criminal offending, or to invite it to negotiate a Deferred Prosecution Agreement (DPA). The Guidance replaces the 2019 Co-operation Guidance and provides some helpful clarifications on the SFO's expectations for self-reporting and the benefits available to corporates who co-operate.

Key Points

Clearer benefits to self-reporting and co-operation

The new Guidance provides corporates with greater confidence that DPAs will be available to those who self-report, stating that "if a corporate self-reports promptly to the SFO and co-operates fully we will invite it to negotiate a DPA rather than prosecute unless exceptional circumstances apply."

This is a departure from the 2019 guidance which stated that even "full, robust co-operation" (which included reporting to the SFO within a reasonable time) did not "guarantee any particular outcome".

DPAs are not completely off the table, however, for corporates that do not self-report. The SFO says it will still consider inviting them to DPA negotiations if their co-operation is "exemplary".

Timescales for reports

Reports must be made within "a reasonable time" (which the SFO acknowledges may depend on the circumstances) and failure to do so is a public interest factor tending towards prosecution. The Guidance acknowledges that some investigation may be required before a corporate can report but once it becomes aware of direct evidence of corporate offending, it must report that information promptly.

Swifter investigations?

The Guidance includes new statements from the SFO on the timing for its investigations, stating that it will seek to:

• Contact corporates within 48 hours of a self-report
• Regularly update the corporate throughout the process
• Decide within six months whether or not to open an investigation
• Conclude any investigation within a reasonably prompt timeframe
• Conclude DPA negotiations within six months

These specific timelines would mark a reduction in the timeframes seen in some DPAs concluded to date and suggest the SFO is serious about encouraging self-reporting in exchange for a swifter resolution of the issues.

Practical guidance on self-reporting

The Guidance is explicit that making a Suspicious Activity Report to the National Crime Agency will not be treated as a self-report to the SFO and that a separate report to the SFO must be made.  

It explains how to report to the SFO's Intelligence Division and says that corporates / their lawyers can discuss the process for reporting with the SFO before making the report, indicating that the SFO is willing to engage with corporates on at least the practicalities of the reporting process. 

Corporates maintaining a valid claim of legal professional privilege over relevant material will not be penalised, but waiving privilege will be seen as a "significant co-operative act".

The Guidance cites examples of co-operative conduct including:

• Proactively preserving, collecting and identifying relevant material
• Providing the facts on the suspected criminal conduct, identifying the individuals involved and any relevant previous corporate conduct and how it was resolved
• Early engagement with the SFO on any proposed internal investigation, including providing updates on the facts and progress and not taking any steps that might prejudice the SFO's investigation.
• Providing non-privileged records of interviews or waiving privilege over privileged interview records and refraining from interviewing employees at the SFO's request
• Notifying the SFO of the involvement or interest of any other regulator, law enforcement or prosector
• Providing information on any disciplinary actions or changes to personnel
• Providing financial information about the benefit or harm the offending has caused
• Presenting an analysis of the corporate's compliance programme at the time of the offending and information on the remediation
• Providing access to employees for interviews and providing them with independent legal advice where appropriate

Examples of unco-operative conduct cited include:

• "Forum shopping" by unreasonably reporting offending to another jurisdiction
• Seeking to exploit differences between international law enforcement agencies or legal systems
• Minimising / obfuscating the involvement of individuals and/or the extent of the offending
• Tactically delaying providing information or material
• Seeking to overload the SFO's investigation with unnecessarily large amounts of material.

Conclusion

There are several clarifications in the new Guidance which corporates will find helpful, particularly if they decide to self-report.  However, the new Guidance does not move the dial significantly on the key decision of whether to self-report in the first place.  In many cases, self-reporting will remain a risky business with many potential downsides and uncertain outcomes.  Moreover, while the target timeframes are helpful, it is unclear that the SFO has the resources to conduct any complex investigation within a "reasonably prompt timeframe" or what that timeframe would be in any particular case.  DPAs could still, in practice, take years to conclude.  It therefore remains to be seen whether the new Guidance will result in the increase in self-reporting that the SFO will be hoping for.