The UK Serious Fraud Office has withdrawn its existing guidance in relation to facilitation payments, self-reporting and corporate hospitality and that guidance is currently under revision. Whilst the SFO has not stated how extensive the revision of its enforcement policies will be, it is generally anticipated that the SFO will be taking a less lenient approach to enforcement of the UK Bribery Act.

How does this affect Australian companies?

Any company that carries on a business, or part of a business, in the UK is subject to the UK Bribery Act regardless of where it is incorporated. The withdrawal of the existing guidance means that until new guidance is available such companies:

  • face an increased risk that there will be prosecutions in relation to facilitation payments, even if the company can demonstrate that it is taking practical steps to curtail such payments. Whilst there currently remains a defence for facilitation payments in Australia, in the UK, as with most other countries, there is no such defence. The withdrawal of the SFO's existing guidance increases the risks of continuing to permit employees or agents to make facilitation payments on behalf of the company;
  • have less certainty of the benefits available if a company self-reports to the SFO, and therefore will need carefully assess whether to self-report if the company identifies corrupt conduct within its organisation. The previous SFO guidance had indicated that self-reporting was likely to result in the SFO only pursuing civil remedies rather than criminal remedies, but that may no longer be the case. In Australia there is currently no guidance in relation to whether companies will receive any benefits from self-reporting; and
  • cannot rely on the previous SFO guidance that "reasonable and proportionate" corporate hospitality would not result in a prosecution action. Corporations will need to assess whether their corporate hospitality could be perceived to be intended to induce or reward the recipient of that hospitality in relation to the performance of their functions.

The UK Ministry of Justice's Guidance (setting out the six principles that companies should apply to ensure that they have adequate procedures in place to prevent bribery) remain in effect, and remain sound guidance for corporations wherever they are carrying out their business.