At this week’s Cambridge Symposium on Economic Crime, the head of the U.K.’s Serious Fraud Office (“SFO”), Richard Alderman, warned that companies believed to be paying bribes to obtain work overseas will be forced to hand over their tax records to the SFO.
As reported in various national newspapers, including the Telegraph, Mr. Alderman explained that the SFO suspected that these companies may still be claiming tax deductions on such payments, which was allowed under English law until 2002, or may have, in some other way, factored them into their tax calculations:
“Companies ought to have the information that they need in order to ensure that they are not claiming deductions in respect of bribes We have, therefore, started to require companies to disclose to us relevant parts of their tax calculations. We want to see how these have been drawn up and we want to see what evidence there is of the identification of bribes.”
Whether or not it produces any ‘smoking guns’, in the wake of a 25% cut to its annual budget, this move indicates that the SFO is seeking to be more creative when investigating cases of fraud and corruption. This was confirmed by Mr. Alderman, who stated that this was only one of several “fresh approaches” being adopted by the SFO.
Mr. Alderman also went on to address the widely held view that, having only come into force on 1 July 2011, it will be several years before any cases are actually brought by the SFO under the Bribery Act:
“There are some who have predicted that after all the controversy surrounding the Act, nothing is going to happen for many years. That is not my prediction. [The prosecution of bribery] is a very high priority for us. Any companies that may have comforted themselves with the thought that nothing is going to happen will have a rude awakening when they start to see what the SFO is able to do in the future.”
This suggests that the SFO has had its eye on a number of prospective targets, and has been preparing its investigations, for quite some time…
Image © Crown Copyright 2011