Government seeks new tools to tackle economic crime wave

LONDON (Reuters) – Companies whose staff act unlawfully might be able to avoid prosecution if they come clean under new laws proposed in Britain as part of efforts to cut the costs and length of increasingly complex investigations.

The practice is already used in the United States but in Britain, although prosecutors can strike a form of plea bargaining with companies, there is no guarantee that the courts will accept those agreements in any trial.

Justice Minister Crispin Blunt and leading lawyer Edward Garnier said on Thursday they planned to introduce so-called Deferred Prosecution Agreements, under which firms would publicly admit wrongdoing, face fines and submit to monitoring.

“If we can encourage companies to self-report and come clean, pay penalties and mend their ways, the time and expense of investigations and prosecutions will be better spent elsewhere, enabling us to bring more individuals and companies to justice,” Garnier said.

The government has launched a consultation period which will run until August 9. After that, the justice ministry will need to publish its response before it can be enshrined in any law.

Blunt and Garnier said law enforcement agencies did not have the tools to tackle investigations that can last years, cost millions of pounds and did not guarantee reparation for victims.

Under the new proposal, a prosecutor would be able to strike a DPA in return for a pledge to comply with a range of conditions. If the company failed to meet its side of the bargain, it could face further penalties and the original criminal proceedings could be brought.

The Serious Fraud Office, which investigates complex and serious corporate crime in Britain and which has been involved in informal consultations over DPA, welcomed the initiative.

“Greater flexibility of resolution on a case-by-case basis that meets the needs of justice must be in the public interest … The option of using a DPA would provide another important weapon in the fight against corporate wrongdoing,” said SFO director David Green.

The SFO, which operates on a tight annual budget of around 34 million pounds, has faced criticism for dropping high-profile investigations.

It is currently investigating a $1.7 billion accounting scandal at Japan’s Olympus alongside U.S. and Japanese peers, after the camera and endoscope maker’s former British chief executive Michael Woodford handed the agency reams of documents on the scandal.

(Reporting by Kirstin Ridley Editing by Maria Golovnina)

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