The FSA said it fined the company for failings in its anti-bribery and corruption systems and controls and that these failings created an unacceptable risk that payments made by the company to overseas third parties could be used for corrupt purposes.
It is the biggest fine imposed by the FSA in relation to financial crime systems and controls ever made and would have been £9.85m had Willis not agreed to settle early, thereby qualifying it for a 30% discount.
According to the FSA, between January 2005 and December 2009, Willis made payments totalling £27m to overseas third parties who assisted it in winning and retaining business from overseas clients, particularly in high risk jurisdictions.
The regulator said Willis had failed to:
- ensure that it established and recorded an adequate commercial rationale to support its payments to overseas third parties;
- 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.
The FSA said these failings 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”.
In addition to these charges, the watchdog said between January 2005 and May 2009, Willis failed to 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. The FSA noted that despite Willis improving its policies in August 2008, it failed to ensure its staff were adequately implementing them.
The FSA also said that throughout the period, Willis’ senior management did not receive sufficient information about the performance of the company’s relevant policies to allow them to assess whether bribery and corruption risks were being mitigated effectively.
During the investigation, the FSA said that Willis identified as suspicious a number of payments totalling $227,000 (£141,000) which it made to two overseas third parties in respect of business carried out in Egypt and Russia. These were subsequently reported to the Serious Organised Crime Agency.
Tracey McDermott, acting director of enforcement and financial crime at the FSA, 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 involvement of UK financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity of the UK financial services sector.”
Willis Limited has offices around the world including in North and South America, across Europe, Asia and Australasia. It provides risk management tools and insurance for its clients which come from a wide range of industries including financial services and insurance. According to its website, one of the services it provides is, perhaps ironically, professional indemnity insurance.