On July 1, 2011, the United Kingdom Bribery Act 2010 (the “Act”) became effective. The Act introduces four new categories of offense: (1) offering, promising, or giving a bribe to another person (the active offense); (2) requesting, agreeing to receive, or accepting a bribe from another person (the passive offense); (3) bribing a foreign public official (specific principal offense); and (4) failing to prevent bribery (strict liability corporate offense). The broad jurisdictional reach of the Act significantly impacts United States companies doing business in the United Kingdom. For example, a U.S. company that carries on its business in the U.K. may be prosecuted for failing to prevent bribery if any of its employees commit bribery anywhere in the world. Thus, a U.S. company’s global activities, even if they take place in a third country and are unrelated to the company’s U.K. operations, may be brought within the jurisdiction of U.K. authorities pursuant to the Act.

The Act imposes potentially harsh penalties, including, for individuals, up to 10 years of imprisonment and/or a fine, and, for corporations, an unlimited fine. Other penalties may include debarment from public contracts, director disqualification in the U.K., and asset confiscation proceedings.

The only defense available to companies charged with failing to prevent bribery is for the organization to show that the company had “adequate procedures” in place to prevent the infractions. It is therefore prudent for all companies doing business in the U.K. to implement compliance systems that adequately prevent bribery in all locations where they do business.

UK Bribery Act 2010 (available at http://www.legislation.gov.uk/ukpga/2010/23/contents)