The Financial Conduct Authority (FCA) has fined Besso Limited £315,000 for a failure to take reasonable care to establish and maintain effective systems and controls for countering the risks of bribery and corruption.
The FCA found that Besso, a general insurance broker, operated a weak control environment surrounding the sharing of commissions with third parties which gave rise to an unacceptable risk that they could be used for corrupt purposes.
Tracey McDermott, the FCA’s director of enforcement and financial crime, said:
"Despite receiving two visits from us, and numerous industry wide warnings, Besso failed to ensure that they had proper systems and controls in place to counter the risks of bribery and corruption in their business activities.
Firms must play their part in preserving the integrity of the UK financial system, including taking all steps necessary to prevent financial crime. Where we find firms failing to do so, we will take action."
Besso’s rule breaches occurred between 14 January 2005 and 31 August 2011. In particular Besso:
had limited bribery and corruption policies and procedures in place between January 2005 and October 2009. It introduced written bribery and corruption policies and procedures in November 2009, but these were not adequate in their content or implementation
failed to conduct an adequate risk assessment of Third Parties before entering into business relationships
did not carry out adequate due diligence on Third Parties to evaluate the risks involved in doing business with them
failed to establish and record an adequate commercial rationale to support payments to Third Parties
failed to review its relationships with Third Parties, in sufficient detail and on a regular basis, to confirm that it was still appropriate to continue with the business relationship
did not adequately monitor its staff to ensure that each time it engaged a Third Party an adequate commercial rationale had been recorded and that sufficient due diligence had been carried out; and
failed to maintain adequate records of the anti-bribery and corruption measures taken on its Third Party account files.
Besso agreed to a settlement at an early state of the FCA investigation and therefore qualified for a 30% discount. Were it not for this discount, the financial penalty would have been £450,000.