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Clifford Chance

Clifford Chance

Regulatory Investigations and Financial Crime Insights

New SFO Corporate Co-operation Guidance issued

The UK's Serious Fraud Office has published new guidance on corporate co-operation. The SFO meaning of co-operation? Providing assistance to the SFO that goes above and beyond what the law requires.

The SFO's Operational Handbook is aimed at SFO staff, and sets out (in redacted form in the externally published version) standard processes, instructions and guidance on the conduct of SFO casework. It now includes the Corporate Co-operation Guidance, which has been put together to assist SFO staff in assessing the co-operation from business entities. It, rather ominously, states at the outset that "Many legal advisers well understand the type of conduct that constitutes true co-operation", but helpfully goes on to provide indicators of good practice.

Some of these are matters of general good practice, and will already be familiar to any large organisation that has experienced any other type of litigation or regulatory action: preserving documentation for example, and providing data to the SFO in appropriate format.

There is particular emphasis on providing relevant documentation and information to SFO investigators on time, in a way which is useful and structured, with accompanying audit trails and which flags information which may undermine a prosecution.

Others indicators of good practice touch on areas which have been hard fought in the past, particularly in the context of Section 2 notices, such as"Provide relevant material that is held abroad" but recognising the constraints on so requiring by adding "where it is in the possession or under the control of the organisation".

It is, of course, not the first time that the SFO has published materials setting out co-operation expectations. As the Guidance itself points out, the Deferred Prosecution Agreements Code of Practice has, since 2014, noted that"considerable weight may be given to a genuinely proactive approach" as among public interest factors against prosecution. And it is not to be expected that the SFO will give co-operation credit for following these good practice indicators beyond considering it as such a public interest factor.

Unsurprisingly, the Guidance includes a section on "Waiving Privilege" and states that if an "organisation claims privilege during an investigation, it will be expected to provide certification by independent counsel that the material in question is privileged". However, the Guidance is also clear that if an organisation does not waive privilege, while it will not getting the corresponding public interest factor against prosecution, it will not be penalised by the SFO.

This does not mean that the SFO will not continue to link privilege and cooperation in its public statements – Lisa Osofsky, the Director of the SFO, was quoted shortly before the Guidance came out as saying that waiving privilege over initial investigative material will be a "strong indicator of cooperation" and "an important factor... when considering whether to invite a company to enter into DPA negotiations".

While it is helpful to have a clear view on what good practice may look like, the Guidance is clear that this is not intended to be used in a tick the box exercise by organisations seeking to use co-operation to lessen the severity of a situation in which the SFO is interested.

The Guidance is clear: co-operation means providing assistance to the SFO that goes above and beyond what the law requires, including:

  • identifying suspected wrongdoing and criminal conduct together with the people responsible, regardless of their seniority or position in the organisation;
  • reporting this to the SFO within a reasonable time of the suspicions coming to light; and
  • preserving available evidence and providing it promptly in an evidentially sound format.

As such, the Guidance underlines that an organisation under investigation will be expected to carry out a great deal of legwork to assist in an investigation if it is to earn any kind of credit for co-operation.