Besso

Release Date: 19th March 2014

To access the original FCA document, click here.

Summary

Besso Limited, a general insurance broker, has been fined £315,000 by the Financial Conduct Authority (FCA) due to significant failings in its anti-bribery and corruption systems and controls. The fine was reduced by 30% from a potential £450,000 because Besso agreed to settle early in the FCA’s investigation.

The FCA identified that between 14 January 2005 and 31 August 2011, Besso’s systems for countering risks of bribery and corruption were inadequate. The firm was found to have a particularly weak control environment regarding the sharing of commissions with third parties, creating a high risk that these payments could be used for corrupt purposes. Besso’s approach to managing these risks was marked by several deficiencies:

1. Limited Policies and Procedures: From January 2005 until October 2009, Besso had insufficient bribery and corruption policies and procedures. Although they introduced written policies in November 2009, these were neither adequate in content nor properly implemented.
2. Inadequate Risk Assessments: The company failed to perform sufficient risk assessments before establishing relationships with third parties.
3. Poor Due Diligence: Besso did not conduct adequate due diligence on third parties to assess the risks involved in these business relationships.
4. Lack of Commercial Rationale: There was a failure to establish and document a valid commercial rationale for payments to third parties.
5. Insufficient Monitoring and Reviews: The firm did not review its third-party relationships regularly or in sufficient detail to ensure their continued appropriateness. Moreover, it inadequately monitored staff to ensure that due diligence and commercial rationales were recorded each time a third party was engaged.
6. Record-Keeping Failures: Besso did not maintain adequate records of the anti-bribery and corruption measures taken in its third-party account files.

Tracey McDermott, the FCA’s director of enforcement and financial crime, emphasised the importance of firms maintaining robust systems to prevent financial crime and uphold the integrity of the UK financial system. The FCA has expressed its commitment to taking action against firms that fail in this regard.

This case serves as a cautionary tale for other firms, underscoring the necessity of establishing, implementing, and continually reviewing comprehensive anti-bribery and corruption policies and procedures. Companies are reminded of the critical role they play in preventing financial crime and are encouraged to ensure all compliance measures are thorough and effectively enforced.

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