Barry Vitou and A. John Pappalardo co-authored an article Lexis®PSL Corporate Crime titled “Statute of Limitations on Bribery—UK and US Perspectives.”
This article was first published on Lexis®PSL Corporate Crime on 22 August 2018.
To read this article, click here.
LONDON – 6 August 2018 – A multidisciplinary London-based team at global law firm Greenberg Traurig, LLP advised InterContinental Hotels Group plc on its arrangements with French real estate investor Covivio (formerly Foncière des Régions) to rebrand and operate 12 high-quality open hotels and one pipeline hotel in the UK following the acquisition of the hotels by Covivio from Starwood Capital Group. The deal was closed on 25 July with the overall transaction being valued at approximately £858 million.
The Consultation
The UK Competition and Markets Authority (CMA) has on 26 July 2018 opened a consultation on revised guidance (Revised Guidance) on competition disqualification orders (CDOs) against directors of undertakings suspected to have been in breach of competition laws.
Recent statistics show investigators taking a harder line and conducting increasing numbers of searches with the Serious Fraud Office more than tripling the number of searches it conducted in connection with ongoing investigations in the 12 months ended 31, March 2018.
Searches by law enforcement investigators, including dawn raids, are inherently intrusive and are often used by law enforcement as a tool in its investigation of suspected crime.
But raids as part of asset seizure probes fall to zero
LONDON – 26 July 2018 – The UK Serious Fraud Office (SFO) launched 30 property raids to gather evidence for its ongoing criminal investigations (i.e. before prosecution takes place) in the previous 12 months year ending March 31. The number is more than triple the number of the same raids undertaken the year before and more than at any time in the preceding five years.
However, raids carried out by the SFO’s Proceeds of Crime Division fell to zero over the same period. Why?
Barry Vitou, shareholder of Greenberg Traurig and head of White Collar Defence and Special Investigations London, provides a theory: “The SFO is adopting an increasingly aggressive stance in its investigation and pursuit of white collar crime and the over tripling of the number of searches undertaken in connection with its active investigations before prosecution confirms that.”
This follows in the wake of increasing enforcement activity and investigations into large corporations and Deferred Prosecution Agreements including penalties and disgorgement running into hundreds of millions of pounds.
“In contrast, the UK Serious Fraud Office (SFO) Proceeds of Crime division, which investigates the recovery of the proceeds of crime so that fraudsters do not benefit from their offending and victims can be compensated wherever possible, did not undertake any searches,” Vitou said.
“It is important that the increasingly hard line taken investigating fraud before prosecution does not come at the cost of recovering the proceeds of crime from white collar criminals,” Vitou said.
SFO statistics show that in the 12 months year ending March 31 (the same year the Proceeds of Crime Division conducted no searches) it obtained Proceeds of Crime orders amounting to £275,000 (c 1% of proceeds of crime orders in the prior year) and .1% of the disgorgement in the biggest DPA to date.
“The lack of raids related to Proceeds of Crime investigations and associated low number of Proceeds of Crime orders in the same year is at odds with public pressure to ensure that white collar criminals are not able to keep hold of assets gained through fraud.”
Vitou warns, “It is hoped this is a blip. However, the statistics could represent a focus on investigating companies. Corporations often reach agreement and pay their fines and disgorgement, in contrast to individual wrongdoers who may be more likely to hide away ill-gotten gains and require the SFO to use its search powers in respect of them.”
Vitou, who authors thebriberyact.com blog, further notes that “telephone number penalties, Deferred Prosecution Agreements and aggressive investigation and enforcement tactics against companies are all taken from the US criminal law enforcement playbook”
“The US has been criticised for its focus on corporations. It is important that the SFO does not fall into the same trap, and simply target corporations as a cash cow for the UK government, at the expense of pursuing individual wrongdoers and recovering their ill-gotten gains,” Vitou said.
“The appointment of a former US prosecutor to head the SFO is entirely consistent with the new US-style approach to white collar crime enforcement in the UK. The increased number of raids for investigations is likely to continue but should not be at the cost of investigating and recovering ill-gotten gains from white collar criminals.”
About Greenberg Traurig, LLP
Greenberg Traurig, LLP (GT) has more than 2,000 attorneys in 38 offices in the United States, Latin America, Europe, Asia, and the Middle East. GT has been recognized for its philanthropic giving, was named the largest firm in the U.S. by Law360 in 2017, and is among the Top 20 on the 2017 Am Law Global 100. Web: http://www.gtlaw.comTwitter: @GT_Law.
 |
 |
| Note: The total amount of Proceeds of Crime Orders obtained by the SFO constitutes the total confiscation orders made plus any additional compensation orders not included within the confiscation orders, plus any civil recovery orders imposed. Source https://www.sfo.gov.uk/about-us/ |
The Higher Regional Court of Frankfurt ruled on 12 July 2018 that manufacturers of luxury products are permitted to restrict authorised resellers from reselling on online marketplaces.
The marketplace restriction at issue was imposed by Coty Germany on Parfümerie Akzente, one of its authorised distributors, to prohibit it from distributing Coty perfumes on a third-party online marketplace. The Frankfurt court confirmed that the restriction is justifiable as it is aimed at preserving the luxury image of Coty’s products. It also found that the restriction, which did not affect the ability of Parfumerie Akzente to maintain its own online shop, did not go further than necessary to achieve this aim. As part of a wider selective distribution system that was administered based on objective, qualitative criteria and uniformly applied in a non-discriminatory manner, the marketplace restriction also fell within the safe harbour under the EU Vertical Block Exemption Regulation.
In Sir Cliff Richard OBE v. The British Broadcasting Corporation and The Chief Constable of South Yorkshire Police [2018] EWHC 1837 (Ch) a UK court has ruled that the reporting by the BBC of a police investigation (which was later closed without prosecution) into Sir Cliff Richard and televised search of his home using a helicopter flying above it violated his right to privacy flowing from Article 8 of the European Convention on Human Rights.
On 12 July 2018 the UK government published a white paper outlining its vision for the UK’s future relationship with the European Union (EU) after the UK’s exit from the EU on 29 March 2019. The white paper is predicated on the UK’s exit from the Single Market and the Customs Union and outlines the government’s desire to establish a new “deep and comprehensive” economic partnership with the EU, as well as establishing an independent trade policy in its dealings with other partners.
On 6 December 2017 the EU Court of Justice (CJEU) issued its long-awaited preliminary ruling in the case of Coty Germany GmbH v Parfümerie Akzente Gmbh, on issues referred from a Frankfurt court concerning the distribution of luxury goods. The ruling follows the approach recommended in the opinion of CJEU Advocate General Wahl, issued in July this year. The CJEU generally – but not always – follows the Advocate General’s non-binding opinion. In summary, the CJEU confirmed that:
1. Suppliers may use a selective distribution system designed primarily to preserve an “aura of luxury” for luxury goods, if the following two conditions are met:
a. Authorised resellers must be chosen on the basis of objective, qualitative criteria.
b. These criteria must be laid down uniformly for all potential resellers and applied in a non-discriminatory manner.
On Nov. 22, UK Chancellor Phillip Hammond announced dramatic changes to the UK real estate market in the 2017 Budget. The Government has announced an intention to extend the scope of UK tax so that disposals of all UK commercial and residential property by non-resident companies, JPUTs, individuals, and other persons are subject to UK tax with effect from April 2019. In addition, the Budget proposes to extend the UK tax net to profits derived by non-residents on disposals of companies, JPUTs and other vehicles, including REITs and funds, which derive over 75 percent of their gross value from UK property. Companies will be subject to corporation tax and other non-residents will be subject to capital gains tax.