For further insight into the corruption probe Sinopharm are facing, Lawyer Monthly benefits from an exclusive interview from Peter Binning, Partner at Corker Binning a top white collar crime firm. Peter is founder and criminal defence partner at Corker Binning, he is regularly ranked in Band 1 by Chambers and as a leading individual by The Legal 500 for his work in fraud and regulatory litigation. Peter acts at the centre of many of the UK’s most high-profile fraud cases involving the FCA and SFO as well as international and complex high-value fraud matters.
Following the news story that Sinopharm executives are facing a huge corruption probe, what is your opinion on this?
I think that the announcement of an investigation into the state-owned Sinopharm is in part a response to criticisms levelled at China for unfairly singling out Western companies in its pharmaceutical corruption probe. Whatever the impetus however – and bearing in mind China is notorious globally for what appears to be an endemic corruption culture – the authorities have to start somewhere. Targeting a senior executive of a state-owned distributor is sending a clear signal that the authorities are taking allegations of corruption seriously but it is hard to see this as any more than a gesture.
How do you think companies can best protect themselves against corruption litigation?
Companies must put in place effective due-diligence and compliance procedures to check all business counterparties backed up by robust training for staff at all levels. Such procedures and training need to be enhanced where the company is operating in a jurisdiction where corruption and bribery is particularly high risk, such as, for example, China, Russia, and many African countries.
It is also essential to have a comprehensive anti-corruption compliance programme communicated and disseminated in such a way that it becomes a visible representation of the corporate culture.
To avoid litigation it is vital that all suspicious transactions and any internal or external whistleblower reports be investigated in proportion to the apparent risk. The record of how a company has responded to suspicious activities in the past will be a vital part of its defence in preventing any action being taken either on a criminal or a civil basis.
What are the main types of cases you deal with regarding corruption?
I have substantial experience of representing both individuals and companies in corruption related investigations and prosecutions, often with an international element. My firm has acted in most of the recent major corruption cases from BAE to the Innospec case and most recently the SFO case of Hall and Dahdaleh which is still before the Southwark Crown Court. We have also acted in the investigation of allegations of corruption relating to Tottenham Hotspur and West Ham, Balfour Beatty, PWS, MW Kellogg, Mabey & Johnson and several Oil for Food cases, other cases in India, several African states, Eastern Europe, the Baltic states and the Turks and Caicos Islands.
What are the main challenges that arise in these types of cases? How do you overcome these challenges?
One of the main challenges is that there may sometimes be a conflict between the company on the one hand, and an individual employee on the other. Problems in this area can generally be overcome by careful advice to ensure that both the individual’s and the company’s positions are protected. It will often be to the advantage of both parties for there to be a measure of co-operation between the two, often to a significant extent, in order to fully understand what has occurred.
Corruption cases will often involve other jurisdictions, so a practitioner must be prepared to liaise with foreign authorities, usually using local lawyers. You cannot simply advise your client on the English law in a vacuum where there are clear cross border issues that are likely to arise. For example, with the US, there may often be the potential for criminal proceedings or penalties in both the UK and the US.
A further complication in corruption cases is that they will often involve aspects of both criminal and civil law, so criminal practitioners must be aware of the possibility of seeking resolutions via a civil law remedy or a criminal disposal short of conviction like a Deferred Prosecution Agreement (DPA); shortly to become available in the UK.
What do you think 2014 holds for corruption litigation?
Despite the hype surrounding its introduction, there has been a dearth of prosecutions in the UK for Bribery Act offences. I suspect that the most significant move in the corruption arena in 2014 will be the introduction of DPAs. We may see the first instance of a DPA being used to target corruption; most likely a case involving a US DPA with an element of the criminal conduct being subject to a UK DPA. DPAs are an attractive tool to both a prosecutor and a company under investigation: for the prosecutor a DPA can avoid the cost of mounting a full scale publicly funded investigation, and for the company it can avoid the serious reputational and economic damage that a prosecution can cause (such as that company being debarred from bidding for public contracts).
I would also predict that the US continues to be zealous in bringing enforcement action under the FCPA but that companies and individuals will become more willing to challenge prosecutors on both sides of the Atlantic and take cases to trial. The fact is that even an apparently strong case can easily unravel at trial.
If you could change or implement legislation, what would you do and why?
I think that governments need to legislate far less and resource prosecution agencies far more. There is little cause to argue now for more legislation in the business crime arena. The UK prosecutor has plenty of scope to investigate wrongdoing with some of the most powerful tools in the modern world and there is no problem identifying an offence in most cases. The problem is that good investigations cost money and that process cannot be outsourced to the private sector in all cases. The US culture and practice encourages companies to settle at almost any cost rather than fight a case at trial. That is not a model we should be following too closely. Prosecutors ought to be challenged and if their case is sound they should have no fears about winning in most cases.
Is there anything else you would like to add?
The global fight against corruption is an important one which western companies will need to invest in heavily in order to make sure that the international “level playing field” ideal which lies behind modern anti-corruption law becomes a reality. But the problem is a bit like kidnapping and ransom; it will never be prevented while kidnappers know that they can negotiate high rewards behind the scenes. In the same way, bribes will always be paid by those who believe that they will never be caught.
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