Record £6.895m fine for UK’s Willis Ltd over anti-bribery controls

According to the FSA ‘these failings created an unacceptable risk that payments made by Willis Limited to overseas third parties could be used for corrupt purposes…including paying bribes.”

Between January 2005 and December 2009, Willis Ltd made payments to overseas third parties that assisted it in winning and retaining business from overseas clients, particularly in high-risk jurisdictions. These payments totalled £27 million.

During the FSA’s review of this period, Willis Ltd identified $227,000 payments to high-risk jurisdictions as suspicious.

They were made to two third parties in respect of business carried out in Egypt and Russia. These were subsequently reported to the Serious Organised Crime Agency.

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Tracey McDermott, the FSA’s acting director of enforcement and financial crime, said: “Willis Limited failed to take the appropriate steps to ensure that payments it was making to overseas third parties were not being used for corrupt purposes. This is particularly disappointing as we have repeatedly communicated with the industry on this issue and have previously taken enforcement action for failings in this area.”

The FSA investigation found that, up until August 2008, Willis Ltd had failed to establish and record an adequate commercial rationale to support its payments to overseas third parties.

According to the FSA’s findings, the company also failed to ensure that adequate due diligence was carried out on overseas third parties to evaluate the risk involved in doing business with them and adequately review its relationships on a regular basis to confirm whether it was still necessary and appropriate for Willis Limited to continue with the relationship.

In addition, between January 2005 and May 2009, Willis Ltd failed to adequately monitor its staff to ensure that each time it engaged an overseas third party, an adequate commercial rationale had been recorded and that sufficient due diligence had been carried out, said the FSA.

Although Willis Ltd improved its policies in August 2008, it failed to ensure they were being adequately implemented by staff, the regulator continued.

Lastly, said the FSA, throughout the period, Willis Ltd’s senior management did not receive sufficient information about the performance of Willis Ltd’s relevant policies to allow them to assess whether bribery and corruption risks were being mitigated effectively.

“The involvement of UK financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity of the UK financial services sector. The action we have taken against Willis Limited shows that we believe that it is vital for firms not only to put in place appropriate anti-bribery and corruption systems and controls, but also to ensure that those systems and controls are adequately implemented and monitored,” said Ms McDermott.

The regulator said in a statement that Willis Ltd has ‘taken significant steps to address the failings identified by the FSA and has committed to carrying out a review of past payments made to overseas third parties to identify any inappropriate payments.’

It also said that the company cooperated with the regulator and agreed to settle at an early stage of the FSA’s investigation. The firm qualified for a 30% discount under the FSA’s settlement discount scheme. Without the discount the fine would have been £9.85 million.

Willis Ltd said that ‘comprehensive and effective action has now been taken by the company to remedy these issues.’

It was keen to stress that the FSA has made no finding that Willis Ltd or third parties were engaged in any unlawful acts.

“We set very high standards for ourselves as a company. We will only accept the very best practice in the systems and controls we apply to our operations. We recognise the importance of such measures in assuring ourselves and stakeholders that the risk of wrong-doing is designed out of the way we do business,” said Brendan McManus, CEO of Willis Ltd.

“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. 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.