Rule of Law

Until the tail end of 2021, the year was set to be remembered for the SFO deciding not to proceed with a number of investigations rather than for what it had done. British American Tobacco, KBR Inc’s UK subsidiaries and individuals associated with Airbus were told they were no longer being probed by the agency, which also ended its 15-year pursuit of businessman Nisar Afzal.

In essence, then, the SFO seemed to be continuing the ‘spring cleaning’ process that was kick-started around the time director Lisa Osofsky said her aim was to ensure the agency makes quicker decisions in relation to investigations.

Then came the quashing of former Unaoil executive Ziad Akle’s bribery conviction, not to mention the Attorney General launching an independent review of the SFO. The Court of Appeal had no doubt that the SFO’s failure to disclose vital evidence had unfairly led to Akle being jailed.

The December quashing decision followed criticism of the dealings that the SFO had apparently entered into with Miami-based private investigator David Tinsley. Judges at the Appeal Court highlighted the lack of a satisfactory explanation for how SFO chief investigator Kevin Davis had apparently deleted data on his mobile phone regarding his personal interactions with the investigator.

This was actually the second time in a year, the presiding Judges noted, that Davis had allegedly wiped a mobile phone of its data.

The SFO now faces the immediate task of persuading the Attorney General, the business world at large and, indeed, its equivalent agencies in other countries that the organisation is indeed fit for purpose. The task is a stern one.

It cannot be forgotten that the prosecution of two Serco executives collapsed last year due to an SFO failure to disclose evidence to defendants.

Cases dropped

2021 witnessed the SFO dropping – and being unsuccessful with – cases at a time when the US Department of Justice (DoJ) is stating its intention to crack down harder on corporate crime. If there’s any merit in the old phrase about the world catching a cold when the US sneezes, we may well witness a rise in investigations in the UK, but it remains to be seen whether the SFO will be fighting fit for the battles it may face.

Ironically, one of the main tasks facing the SFO may be building bridges with the aforementioned DoJ. Subsequent to the turbulence of the Unaoil investigation, the SFO will need to ensure that its relationships with counterparts across the Atlantic are as good as they possibly can be. Cross-border co-operation will be absolutely key when it comes to any number of future investigations.

The agency may also have to see how relations with its European counterparts develop now that Brexit has ensured the UK is not part of the newly-created European Public Prosecutor’s Office, which has been hailed as ushering in a new era of European Union (EU)-wide co-operation to combat fraud.

It seems likely that a number of those aforementioned future investigations – even many that relate specifically to bribery and corruption – will focus, at least in part, on environmental, social and governance issues. An increased emphasis on such issues has seen legislation enacted throughout the EU that’s leading to companies being investigated over suspected Human Rights violations.

As things stand, it remains to be seen if such investigations will eventually involve some of the UK’s big corporate names and, further, how the SFO would manage those investigations, many of which could end up giving rise to suspected fraud-related probes.

Prior to the Akle case, the imminent arrival of 2022 was being accompanied by what can only be seen as a charm offensive by Lisa Osofsky. She had joined the Attorney General to tell MPs about the SFO’s role as defender of the UK’s economy, been particularly vocal about the use of deferred prosecution agreements (DPAs) and had claimed that the SFO was learning lessons from the Serco prosecution collapse.

Osofsky’s promotional activities on behalf of the SFO came in the wake of what, at best, had been a patchy run of results. The Supreme Court had clipped the SFO’s wings somewhat by ruling that the agency’s powers under Section 2 of the Criminal Justice Act don’t entitle the organisation to compel a foreign company with no business or presence in the UK to produce documents held outside of that particular jurisdiction.

Battles ahead

Last year did bear witness to the SFO achieving a guilty plea from GPT over alleged corruption in Saudi Arabia in addition to further successes regarding Petrofac and Unaoil.

The SFO can also point to the fact its use of DPAs over the past six years has seen enough money raised to fund the agency’s operations over that period four times over. That said, the SFO is funded directly by Government.

Set against a recent backdrop of deck clearing, risk avoidance and limited success and the gathering clouds of both pandemic-related fraud and fall-out from the Akle case, the SFO now has to prove it can meet the battles ahead.

It would be melodramatic to call 2022 a make-or-break year for Osofsky and Co, but it’s certainly shaping up to be a significant 12-month ‘stress test’.  

Aziz Rahman is Senior Partner at Rahman Ravelli (www.rahmanravelli.co.uk)