On 21 November 2024, the Serious Fraud Office (SFO) applied to court alleging that UK-based seismology instrument provider, Güralp Systems Limited (Güralp), is suspected of breaching the conditions of a 2019 Deferred Prosecution Agreement (DPA).

A quick recap on DPAs

As a reminder, a DPA is an agreement reached between a UK criminal prosecutor and an organisation that could otherwise be prosecuted for fraud, bribery or other economic crime. Avoiding lengthy trials, once agreed, the court prosecution of the organisation is suspended provided certain obligations are met – usually requiring payment of a financial penalty and/or compensation. The SFO has issued all but one of the DPAs since their introduction in 2014, with the Crown Prosecution Service securing its first DPA in 2023. 

What do we know here?

The five-year DPA entered into by Güralp arose following charges that Güralp engaged in a conspiracy to make corrupt payments and failed to prevent bribery regarding a scheme involving payments to a South Korean public official. Under the terms of the 2019 DPA, Güralp agreed to pay £2,069,861 by way of disgorgement, committed to review its internal ABC policies, procedures and controls, and report to the SFO annually in respect of its ABC compliance programme.

What does this mean?

If an organisation is found to have failed to comply with a DPA, criminal prosecution through the courts may resume. It is currently not clear in what manner the SFO alleges that Güralp breached its DPA. However, it is significant that this is the first time that a UK prosecutor has taken an organisation to court accusing it of breaching a DPA and potentially highlights an emerging trend of the SFO adopting a more stringent approach in exercising its enforcement powers.

What’s next?

The SFO has requested a hearing at Southwark Crown Court in respect of this matter.

The authority has previously faced challenges in fully exercising its powers regarding the conviction of individuals in respect to conduct that is subject to DPAs. Following the Güralp trial, all three individuals charged with conspiracy to make corrupt payments were acquitted, with a similar result occurring in a trial regarding Tesco. The SFO finally secured its first individual conviction in March 2023.

In our article on the bribery conviction of a former Madagascan presidential aide following investigation by the National Crime Agency, we highlighted that the SFO intended to become "bolder, more pragmatic, more proactive". The SFO's readiness to seek enforcement regarding this alleged DPA breach may be an indication of a future trend in being strict in the use of its enforcement powers. It is also possible that the introduction of the "failure to prevent fraud" offence will increase the number of DPAs issued over time, but whether this will result in more stringent enforcement remains to be seen.

We will keep you updated on significant developments as they arise. However, should you want to discuss anything raised in this article further, please contact your usual Dentons contact or one of the authors.