M&A Weekly Update: fraud, bribery and money laundering sentencing guidelines; limited liability partners as workers; and more
The UK’s sentencing council has published definitive guidelines on ‘Fraud, Bribery and Money Laundering Offences’. It is the first time that a guideline has been included for the sentencing of money laundering offences. The maximum penalty for an individual convicted of money laundering is up to 14 years’ imprisonment and a fine of up to 125 per cent of weekly income. Corporates are subject to unlimited fines although the maximum penalty suggested in the guidelines is up to 400 per cent of the harm caused. Throughout the revised guidelines there is a greater emphasis on the harm done to victims rather than simply financial loss. Publication of the guidelines comes in the same week that the Serious Fraud Office announced its investigation into GlaxoSmithKline (GSK) in relation to bribery offences.
Impact — the sentencing guidelines apply to all individuals and corporates sentenced on or after 1 October, regardless of the date of the offence. Courts must follow the guidelines unless it would be ‘contrary to the interests of justice to do so’. It is worth noting that companies are, from February this year, now able to enter into deferred prosecution agreements (a DPA) with prosecutors in relation to fraud, bribery and money laundering offences. The benefit of a DPA is mitigated by the requirement that penalties broadly reflect fines, it must be court approved in an open hearing and only applies to the corporate entity. Any individual with liability, such as a director, is outside the scope of a DPA.
Background — DPAs are agreements between a prosecutor and a body corporate, partnership or unincorporated association (the defendant). As long as the defendant complies with the terms of the DPA, the prosecution of specified criminal offences will be suspended i.e. the prosecutor will bring, but not immediately proceed with, criminal charges pending successful compliance with agreed terms and conditions stated in the DPA…
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