Lesson to be learned from Standard Bank financial orders

Posted by John Mitchell on

On 30 November 2015, the Crown Court approved a deferred prosecution agreement entered into by Standard Bank with the Serious Fraud Office to settle a bribery allegation triggered by a self-report made by the bank in 2013. The allegation settled was its failure to prevent bribery by a subsidiary bank to obtain an appointment to raise funds for the Tanzanian government. The total cost of the agreement to Standard Bank is in excess of $32m.

There is a defence to such an allegation: having in place adequate procedures and policies designed to prevent persons associated with organisation from undertaking bribery. Significantly, however, this defence was not available. In the words of the judge: 

"The applicable policy was unclear and was not reinforced effectively to the Standard Bank deal team through communication and/or training. In particular, Standard Bank’s training did not provide sufficient guidance about … procedures where two entities within the Standard Bank Group were involved in a transaction and the other Standard Bank entity engaged an introducer or a consultant... There were also failings in terms in … not addressing the arrival of a third party charging a substantial fee."

In short – policies should be clear and reinforced to staff by communication and training.

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John specialises in risk and compliance, advising businesses in those areas of commercial life where the criminal law or penal sanctions are used to regulate business.

John Mitchell
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