It has been interesting to see the reactions around the world to the UK’s new Bribery Act 2010 ("Bribery Act") which came into force earlier this month. Perhaps unsurprisingly, eyes have been on what the US has made of it given its long history in this area and the application of the Foreign Corrupt Practices Act of 1977 (as amended) ("FCPA").
One major area of departure between the two pieces of legislation is in relation to facilitation payments, that is, payments to a foreign official, political party or party official the purpose of which is to expedite or to secure the performance of a routine governmental action by a foreign official, political party or party official. The FCPA permits such payments but the Bribery Act makes no distinction between facilitation or expediting payments and bribes. Furthermore, in addition to public officials, the Bribery Act outlaws facilitation payments to private individuals.
This increased scope is obviously causing concerns for those that had comfort in availing of the exception for routine governmental action under the FCPA and Reuters reports that:
"U.S. companies, already sweating under heightened enforcement of anti-corruption laws at home, are nervously reviewing their policies on how they wine and dine business contacts abroad in the wake of tough new regulations imposed in Britain."
However, one should not ignore the far reaching impact of the FCPA itself. This is particularly relevant in light of Rupert Murdoch, chairman and CEO of News Corporation, and his son, James, facing a hearing of the UK’s House of Commons Culture, Media and Sport Select Committee this week to answer questions in connection with phone hacking alleged to have been conducted by News of the World journalists. There are suggestions that payments may have been made to police who would be likely to fall within the definition of public official for the purposes of the FCPA. Given that the company running the News of World newspapers is a subsidiary of the NASDAQ-listed News Corporation, this would bring the newspaper’s activities squarely into the ambit of the FCPA.
Whilst US companies may be used the prohibitions against certain payments under the FCPA, the Bribery Act will no doubt set some hares running due to its more restrictive nature.