The UK government announced on March 30 that the Bribery Act will come into force on July 1, 2011.
The Bribery Act represents an important shift in UK anti-corruption legislation and in addition to their domestic jurisdiction, gives the English courts broad jurisdiction over companies and individuals based outside the UK. Under the Act, the English courts can impose unlimited fines and imprison individuals for up to 10 years for the following offences:
- accepting a bribe
- bribing a foreign public official
- a commercial organisation failing to take adequate steps to prevent a bribe that has been paid
- an officer consenting to or conniving in the payment of a bribe
There are no exceptions for facilitation payments, and the Act is not limited to corruption of foreign public officials.
The jurisdictional reach is achieved under the Act by giving the English courts power in relation to the offences of bribing, accepting a bribe and bribing a foreign public official where any relevant act takes place in the UK or where any company or individual involved has a close connection with the UK.
Additionally, the Act provides broad jurisdiction in respect of an important new offence of failing to take adequate procedures to prevent a bribe that has been paid. A new offence is committed where a bribe has been paid in connection with a commercial organisation’s business; and the only defence permitted under the Act is if the organisation had adequate procedures designed to prevent the payment of bribes. The English courts will take jurisdiction in relation to this offence where a commercial organisation carries out part of its business in the UK.
The UK government also published guidance on March 30 as to the “adequate procedures” on which commercial organisations will be able to rely as their defence to the otherwise strict liability offence of failing to take adequate steps to prevent a bribe that has been paid. This identifies a number of general principles and guidance by reference to case studies.
Prosecution and Punishment
The UK Serious Fraud Office is charged with the investigation and prosecution of Bribery Act offences. It has also recently published its guidelines on the exercise of its discretion on the prosecution of Bribery Act offences.
The English courts also provided important indicators of their approach to overseas corruption in a series of cases in 2010 and earlier this year. A senior judge described overseas corruption as at “the top end of corporate offending” and identified one factor in sentencing the UK subsidiary of US company Innospec Inc as the risk of re-offending, stating that had he not been satisfied on the (low) risk of re-offending because of a change in management, he would have considered fixing a fine at a level to put the company out of business.
The period until July 1, when the Act comes into force, is intended to provide a period for those affected to ensure compliance. Most obviously, companies need to review their anti-bribery procedures to ensure they comply with the UK government’s guidelines. Only with these compliant procedures will commercial organisations carrying on part of their business in the UK have a potential defence to the new offence committed where a bribe has been paid in connection with its business.