The new Director of the SFO, Lisa Osofski, assumed office on 28 August 2018. Her appointment was announced in June 2018 and, whilst it was announced then that she would not be able to take office immediately due to some existing professional obligations, she in fact started a little earlier than planned.
Ms Osofski is a US and UK national and formerly worked for the FBI as Deputy General Counsel. She was previously on secondment to the SFO and had been in private practice since 2013.
The new Director inherits a significant workload. The SFO are involved in a wide-range of investigations currently. It is also involved in protracted litigation with ENRC over privilege and the way in which the SFO has used its powers to seize documents. The SFO lost the latest round of that litigation in the Court of Appeal earlier this month. The next hearing in that litigation is scheduled for early October.
At the same time she inherits an SFO in decent shape. The SFO under its previous Director, Sir David Green, had some success – notably in agreeing a DPA with Rolls-Royce (see our alert here) and Sir David’s investment in technology to run cases (which we wrote about here) should undoubtedly help investigate in the digital age.
A key element of recent SFO cases has been international co-operation. It is hard to think of a case in the last five years where cross-border co-operation has not been a feature. The new Director, with her US connections, would appear to be well-placed to continue that. In a recent speech in Cambridge the Director herself emphasised this:
“Our kinds of cases are becoming increasingly multijurisdictional and complex, so cooperation to achieve global settlements like Rolls-Royce are ever more important. Strengthening and deepening the relationships that make this happen is going to be a major focus for me.”
In the Cambridge speech the Director particularly singled out work with France, Argentina, Canada and Australia. She said that close co-operation with the US would continue with a secondment from the Department of Justice.
National law enforcement and regulators
The new Director is also looking at closer co-operation with other UK agencies. In addition there seems to be an intention to improve relations with the legal profession which suffered given the previous regime’s attitudes on privilege and some odd statements about a seeming preference for internal investigations to be handled by non-lawyers to allow the SFO to gain greater access to documents ‘unfettered by privilege’.
The SFO has been contributing to the design and build of the National Economic Crime Centre (NECC) over the last nine months and will be seconding staff into the centre when it becomes operational. The SFO will continue to work with the NCA to tackle serious and organised crime.
In addition to the volume of data, one of the greatest challenges faced by the SFO in their investigations is the wide range of devices they are trying to extract material from and the strength of encryption on those devices. In some respects this is a consequence of tougher data protection laws. Under GDPR for example the loss of a device containing personal data may be reportable and lead to severe financial penalty. It is inevitable that companies have spent more efforts securing those devices over the last three years. It is equally inevitable that that will make it harder for the SFO to extract data.
The new Director said in Cambridge:
“Technology companies need to work with us on this issue.
As this is a common challenge among the law enforcement and regulatory communities, we’ll be looking to work closely with our partner agencies in the UK and abroad to ensure we’re taking a joined up approach to this, and so we can earn from each other and share best practice on other technology related issue too.”
Proceeds of crime
The new Director has also confirmed that the SFO will continue to prioritise the recovery of criminal proceeds. A number of hearings are scheduled for this year including an enforcement hearing against Gerald Smith, one of the defendants in the Smith and Ouzman case which we wrote about here. By their nature, SFO cases involve sophisticated criminals who put effort in to distance themselves from the assets they control. Significant challenges include assets located overseas; competing claims from third parties; the misuse of trusts; and assets hidden behind opaque structures around the world. These difficulties can be particularly acute in SFO cases. Exposés like the Paradise papers and Panama papers are likely to help with the SFO’s efforts here, particularly when coupled with greater technological ability. Here the SFO may have an advantage over other agencies with the fact that it has technical expertise, accountancy expertise, investigators and lawyers all under one roof.
It may be significant that the Director mentioned France, an EU country, in her short list of mentions on the topic of international co-operation. The Director’s first term could see the UK withdrawing from the EU. There are more details on the possible effects of Brexit in this area here.
The future of the SFO
Much has been made of the supposed imminent death of the SFO. It has been said that the current Prime Minister, Theresa May, is determined to see its abolition and that the new Director has also spoken out in favour of that plan. There was no hint of that in the Cambridge speech however:
“I started a 5-year term with the Attorney General’s support and commitment to maintaining the independence and prominence of this organisation. That’s the basis on which I took this job and what I expect to find throughout my tenure.”
Whether in the current political climate anyone can guarantee a five year tenure, let alone an Attorney-General who has been in office for just two months, remains to be seen.
There are currently Parliamentary hearings into the working of the Bribery Act 2010. Legislating for a new body may not be the Government’s highest priority currently.
For further information
You can also find our alerts on bribery-related topics here.
For more information please contact Jonathan Armstrong or André Bywater or who are lawyers with Cordery in London where their focus is on compliance issues.
|Jonathan Armstrong, Cordery, Lexis House, 30 Farringdon Street, London EC4A 4HH
T: +44 (0)20 7075 1784
|André Bywater, Cordery, Lexis House, 30 Farringdon Street, London EC4A 4HH
T: +44 (0)20 7075 1785