The Financial Services Authority (“FSA”) recently announced its intention to carry out a thematic investigation of the policies and procedures that investment banks have in place to prevent their staff and agents from paying or receiving bribes. Click here for the full speech.
This coincides with the coming into force of the Bribery Act 2010 on 1 July 2011. Click here for more information about the Bribery Act.
Thematic reviews are carried out by the FSA to look into widespread issues affecting a whole industry, market or product and result in the publication of a report of what the FSA discover. Although they may lead to enforcement action against specific firms depending on what the FSA find, the reviews are not enforcement actions in themselves.
A similar review was carried out of the insurance sector which resulted in the publication of a report in June 2010 highlighting a widespread lack of understanding of the risks of corruption and compensation and bonus schemes which increased the risks of bribery.
In their recent announcement, the FSA highlighted the overlap between corruption and money laundering. Indeed, most banks will already have detailed procedures in place to reduce the risk of failing to comply with, for example, anti-money laundering rules as well financial sanctions and FCPA requirements. They may well therefore have most of the relevant procedures in place to deal with bribery risks already
