The SFO is broadening the net to catch bribery

Richard Alderman, the Director of the Serious Fraud Office, announced yesterday that the SFO will be asking companies to provide details of their tax logs to see if they have claimed tax deductions on known bribes.

“We want to see what evidence there is of the identification of bribes…companies therefore need to appreciate that we are going to be asking for the relevant parts of their tax calculations” Mr Alderman told a conference.

Mr Alderman has called for a strengthening of prosecutorial tools in the fight against white-collar crime, including the ones it used in cases against BAE Systems and Innospec.

While lawyers welcomed innovation in the way the SFO undertook bribery investigations, they suggested the agency may have difficulty in proving bribery through looking at a company’s tax calculations.

“The SFO is right to consider new investigation techniques in its effort to enforce the Bribery Act” said Jonathan Fisher QC, a senior tax and fraud barrister with Devereux Chambers in the Temple, “but requiring companies to disclose their tax calculations is unlikely to reveal that a bribe has been paid. Companies are more sophisticated in their practices and payment of a bribe is usually supported by an invoice for consultancy services.”

The first prosecution under the new Bribery Act was filed last week by the Crown Prosecution Service rather than the SFO, against an east London court clerk accused of accepting bribes.

Source: Financial Times, Tuesday September 6 2011