Successful end to the first UK deferred prosecution agreement

• United Kingdom

• Fraud and financial crime

13-12-2018

On 30 November 2015, the Serious Fraud Office (SFO) and Standard Bank PLC, now known as ICBC Standard Bank PLC (Standard Bank), entered into the UK’s first deferred prosecution agreement (DPA) under which the SFO agreed not to prosecute Standard Bank for three years. The DPA has now come to a successful end.

In order to benefit from the DPA, Standard Bank agreed to comply with six terms:

1. Cooperation: Standard Bank was required to cooperate fully and honestly with the SFO and other authorities investigating the matter, including disclosing information and material not protected by a valid claim of legal professional privilege and any other legal protection against disclosure, in respect of the activities of those involved.
2. Compensation: Standard Bank agreed to pay $6 million (plus interest of more than $1 million) to the Government of Tanzania.
3. Disgorgement of profits: It was agreed that Standard Bank had gained $8.4 million in profits as a result of the alleged offence. This was paid over as a disgorgement to the SFO for onward transmission to the UK Treasury.
4. Financial penalty: The SFO also imposed fines totalling $16.8 million.
5. Costs: Standard Bank paid £330,000 as the reasonable costs of the SFO’s investigation and of entering into the DPA.
6. Corporate compliance programme: As part of a review of its policies, Standard Bank agreed to commission an independent report on a scope agreed by Price Waterhouse Coopers LLP and the SFO, and satisfactorily implement the advice or recommendations set out in the report within 12 months.

On 30 November 2018, the SFO announced the end of the DPA, confirming that Standard Bank had fully complied with the terms, and a formal notification was sent to the Court.

Impact on Firms

This successful outcome to the UK’s first DPA is encouraging news for the SFO and its Director Lisa Osofsky, who has made clear that DPAs are at the core of her strategy.

The news will also be welcomed by companies that may be under investigation or anticipate becoming subject to criminal proceedings. Successfully negotiating and then completing a DPA allows a company to draw a line under its past behaviour while avoiding a potentially lengthy and costly public trial and possible criminal conviction. Companies can take comfort from the fact that a DPA must be approved by the Court, which must be convinced that its terms are fair, reasonable and proportionate and that the DPA is in the interests of justice. We anticipate further developments around DPAs in the near future.