The twice-delayed implementation of the Bribery Act 2010 to allow further development of guidance by the Ministry of Justice, and additional time for companies to develop adequate anti-corruption policies and procedures, appears close to resolution with the issuance of what some have called "weakened" enforcement procedures. Regardless of whether any tinkering might provide relief to some, it appears clear the new statutory regime will have real teeth should the prosecutors choose to grind them.
Recently The Guardian newspaper obtained what purports to be the long-awaited draft guidance from the Ministry of Justice under the U.K. Bribery Act 2010. Once that guidance issues, it is understood that there will be a further three-month preparatory period for compliance before the Act itself comes into force. The key "weakening" or "softening" found in the new draft appears to be in the jurisdictional area. Previously the Act’s very broad and undefined ambit covering all companies that "carry on a business, or part of a business, in ... the U.K." was of concern, particularly whether the reach would extend to companies listed on the London Stock Exchange but not otherwise "operating" in the U.K. It now appears, if the leak is to be believed and the draft becomes final, that registration alone will not be sufficient for exposure. Further government comments, however, have reminded all that it will ultimately be up to the courts to decide in individual cases whether a company carries on a business or part of a business in the U.K.
As we have previously pointed out, even if jurisdiction is reined in a bit, the Bribery Act will still be significantly more expansive in reach than the U.S. Foreign Corrupt Practices Act (FCPA).1
The FCPA deals primarily with bribery of government officials, while the U.K. Act also covers corruption in commercial dealings between private entities. The FCPA requires a showing of intent and awareness at senior levels. The U.K. Act provides for strict liability for any company that fails to prevent bribery not only by its own employees but also by anyone "associated" with the company. The Bribery Act also does not exempt "facilitation" payments that are "safe-harbored" under the FCPA. There is also a significant issue as to the legality of corporate hospitality, if a U.K. prosecutor determines it is of a kind or value to "subvert the duties of good faith or impartiality that the recipient owes his or her employer."
The Bribery Act does provide a defense for companies that can prove they have adequate anti-bribery procedures in place. As we have previously recommended, any company that has a U.K. office, that has employees who are U.K. citizens, or that provides goods and services into the U.K. economy or to a U.K. organization should be actively developing such a program in consultation with its U.S. and U.K. legal advisers. If the company also has FCPA exposure, coordination of its entire anti-corruption policy should be revisited to ensure that all bases are adequately covered and the differences between the two Acts properly taken into account.