The FSA has fined Willis Limited £6.895m for failings in its anti-bribery and corruption systems and controls.
The fine, which is the largest in relation to financial crime systems and controls to date, relates to an unacceptable risk being created by Willis Limited over payments it made to overseas parties that could have been used for corrupt purposes. Willis Limited is one of the leading insurance and re-insurance brokers in the London market.
Between January 2005 and December 2009 Willis Limited made £27m worth of payments to overseas third parties who assisted it in winning and retaining business from overseas clients, particularly in high risk jurisdictions.
The FSA found that Willis Limited failed to ensure it established and recorded an adequate commercial rationale for the payments, failed to ensure adequate due-diligence on the third parties was made before doing business with them and failed to adequately review its relationship on a regular basis to confirm that Willis Limited should continue with the partnership.
The FSA says these failures contributed to a weak control environment surrounding payments to overseas third parties and gave rise to an unacceptable risk that these payments could be used for corrupt purposes, including paying bribes.
The regulator also says that Willis Limited failed to adequately monitor its own staff each time it engaged with the third party, an adequate commercial rationale had been recorded and that sufficient due diligence had been carried out. The FSA says Willis Limited improved its policies in August 2008 but it failed to ensure that its staff were adequately implementing them. It also says that senior staff at Willis Limited did not receive the relevant information about the performance of relevant Willis Limited policies to allow them to access whether bribery and corruption risks were being appropriately managed.
The FSA says that during the investigation Willis Limited found $227,000 of payments made to two overseas third parties in respect of business carried out in Egypt and Russia. Both have been reported to the Serious Organised Crime Agency.
FSA acting director of enforcement and financial crime Tracey McDermott says: “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 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.”
Willis Limited cooperated with the FSA and agreed to settle at an early stage of the FSA’s investigation. The firm qualified for a 30 per cent discount under the FSA’s settlement discount scheme. Without the discount the fine would have been £9.85 million.