Britain’s financial watchdog on Thursday said it had fined British insurance broker Willis Limited nearly £7.0 million for failing to ensure payments to overseas third parties were not used for corrupt purposes.
The Financial Services Authority said it had fined the company, a unit of the world’s third-biggest insurance broker Willis Group Holdings, £6.895 million (7.9 million euros, $11.14 million) “for failings in its anti-bribery and corruption systems and controls.”
It added in a statement: “This is the biggest fine imposed by the FSA in relation to financial crime systems and controls to date.”
The announcement comes after Britain earlier this month implemented new bribery laws.
The FSA said that the failings of Willis Limited created an “unacceptable risk” that payments made to overseas third parties could be used for corrupt purposes.
According to the watchdog, Willis Limited had between 2005 and 2009 made payments of £27 million to overseas third parties who had assisted the company in gaining business.
The FSA said Willis failed to establish and record an adequate commercial rationale to support the payments, nor did it ensure due diligence was carried out with foreign clients, or evaluate the risks of doing business with them.
During the FSA investigation, Willis Limited identified as suspicious a number of payments totalling $227,000 which it made to two overseas third parties in respect of business carried out in Egypt and Russia.
Tracey McDermott, the FSA’s acting director of enforcement and financial crime, said “the involvement of UK financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity of the UK financial services sector.”
Willis co-operated with the FSA and agreed to settle at an early stage in the investigation, allowing the group to qualify for a thirty percent discount on the original fine of £9.85 million.
“When we discovered some of our businesses had not got that right in the past, we were swift to engage with the FSA towards today’s regulatory resolution,” said Willis Limited chief executive Brendan Macmanus.
“Our close co-operation has been recognised by the FSA and we are grateful to them for that. It goes without saying that our compliance framework and its application across the business are now very robust and central to the leadership of the company. We can now move forward, stronger as a result,” he added. Britain’s new Bribery Act, which updates its decades-old laws on corruption, creates new offences of offering or receiving a bribe, bribing foreign public officials or failing to prevent a bribe being paid on behalf of an organisation.
British-based companies can be prosecuted under the new law regardless of where the offences occurred. Foreign firms with a listing in London are not automatically brought into the law’s reach, however, as the question of jurisdiction is left to the British courts to decide.
London, July 21, 2011 (AFP)
