A new approach to fraud on a global scale

With more litigation and discussion in relation to the extra-territorial reach of government powers Amanda Pinto QC has written the following article, published in the Times Online:

https://www.thetimes.co.uk/article/a-new-approach-to-fraud-on-a-global-scale-zznb8rzhp

“Recent developments in commercial crime investigations acknowledge that a more global response is necessary to combat fraud. They also show a trend away from a reliance on mutual legal assistance — co-operation between states to obtain evidence through diplomatic channels — which can be cumbersome and slow.

In a recent case the Serious Fraud Office (SFO) served section 2 notices requiring production of material held overseas by the foreign parent company of a corporation that it was investigating. The parent company argued that the SFO’s jurisdiction did not extend this far. The court, however, held that a section 2 notice  is lawful, even in the case of a foreign company, as long as there is a “sufficient connection” between the company and the UK. 

The court acknowledged that it was a “strong thing” for the law of state A to infringe the sovereignty of state B by requiring a citizen of state B on B’s territory to take action, under threat of criminal sanction in state A.  Nonetheless, because documents relevant to an investigation of a UK company were increasingly likely to be held overseas by foreign companies, the power of section 2 would be frustrated — and the public interest not served —if a foreign company could refuse to provide documents on grounds of jurisdiction, that is, simply because they were overseas.

The court did, however, set some limits: it ruled that neither the fact that the company was the parent company of a UK company, nor that it had co-operated with the SFO, was enough, on its own, to demonstrate a sufficient connection. The second ruling must be policy-based: it would clearly be contrary to the public interest to penalise a company for co-operating with the authorities.

In practical terms, therefore, a foreign company complying with an SFO section 2 notice without challenging the “sufficient connection” may now be seen as a valuable hallmark of co-operation. Other agencies (such as the Financial Conduct Authority and National Crime Agency) are likely to adopt a similar approach to their compulsory powers.

There have been other developments. Under the Crime (Overseas Production Orders) Bill 2018, if passed, a court would be able to grant an order requiring an overseas service provider to produce or allow access to electronic information stored overseas for the purposes of investigating serious crime, obviating the need for mutual legal assistance.

The Court of Appeal in the recent ENRC appeal, confirmed the principle of legal professional privilege and, criticising the current narrow definition, Sir Brian Leveson referred to the undesirability of the UK being out of step with other common law countries when so many multinationals operate across borders.

Finally, the SFO’s new director, Lisa Osofsky, has emphasised her intention to liaise closely with foreign law enforcement agencies. She has already appointed a former prosecutor, Peter Pope of the US law firm Jenner & Block, to build and consolidate relationships with the US authorities. She also emphasised that she wants to encourage co-operating suspects to come forward. 

Each of these steps reflects an awareness that modern crime, and the globalisation of financial wrongdoing, fraud and corruption in particular, now require a different approach to cross border investigations. 

Amanda Pinto QC”

http://33knowledge.com/amanda-pinto-qc/

Fiona Jackson acts for SFO in successful civil recovery order to recover £4.4m from corrupt diplomats in Chad Oil share deal.

Following a successful application in the High Court, the SFO is set to recover millions lost in a corruption case which saw Griffiths Energy bribe diplomats in the United States and Canada.

Securing exclusive contracts with corrupt deals, Griffiths Energy bribed Chadian diplomats with discounted shares deals and ‘consultancy fees’ using a front company ‘Chad Oil’ – which was set up days before agreements were signed.

‘Chad Oil’ was used by senior diplomats at the Chadian Embassy to the United States to facilitate a deal which saw the wife of the former Deputy Chief, Mrs Ikram Saleh purchase 800,000 shares at less than 0.001$CAD each, before selling them on for a considerable profit.

Griffiths later self-reported these and other transactions as bribes intended to illegally secure commercial interests in Chad and pleaded guilty to corruption charges brought by the Canadian authorities.

Following the takeover by Griffiths Energy by a UK corporation and share sale via a UK broker, the corrupt proceeds entered the UK’s jurisdiction and the SFO began civil recovery proceedings to secure the £4.4m share sale profits from Ikram Saleh.

The matter was brought to a three-day trial at the High Court which today granted the SFO’s order to the value of £4.4m, the first time money has been returned overseas in a civil recovery case.

Fiona Jackson has been involved for some years and this marks the most recent success for the SFO with their pursuit of criminal funds via civil recovery.   

Minister of State for International Development, Harriett Baldwin said:

“The UK Government has a zero tolerance approach to corruption and today’s landmark judgment means this money can be used to help the people of Chad.

“DFID is already working in Chad, investing in humanitarian programmes and supporting safety nets to tackle poverty. We will now be working on the details of how these recovered funds can best help one of the poorest countries in the world.”

If you would like to find out more about this case or instruct Fiona Jackson please contact her Practice Directors via email or on 0207 440 9950.

Fiona Jackson and Abigail Coghill-Smith speak at ACE Conference

Fiona Jackson and Abigail Coghill-Smith were invited by the City of London Police and Metropolitan Police to speak about Mutual Legal Assistance on the first day of a two-day conference of ACE [Asset Confiscation and Enforcement] Team Leaders at the City of London’s Guildhall, held on 26th and 27th February 2018.  They addressed in detail how to trace, restrain and confiscate, or freeze and recover overseas assets and repatriate their value to England and Wales, with tips on making successful applications for mutual assistance and mutual legal assistance in criminal and civil cases generating proceeds of crime.   

To instruct Fiona or Abigail or discuss any of the issues raised please speak with their Practice Directors on +44 (0) 20 7440 9950 or via clerks@33cllaw.com