The new UK Bribery Act 2010 and its corporate offence provisions extend the potential prosecutorial reach far beyond the country’s borders. The Act has serious potential implications for non-UK companies. Its provisions apply to companies who simply have a UK business presence and to acts undertaken by persons of any nationality, anywhere in the world. In light of the strict liability nature of the offence and limited defence available, counsel should be taken and careful consideration given to developing responsive policies and procedures.
Our previous articles have discussed the UK Bribery Act 2010, its provisions, the government consultation now ongoing, and the vicarious liability for acts of associated persons.1 This article focuses on the Act’s broad jurisdictional scope and potential extraterritorial reach. Under the Bribery Act, any company or oranisation having a UK “business presence” is covered by the Act and subject to jurisdiction. There are four principle ways that overseas companies generally establish a business presence in the UK. They may incorporate a domestic UK subsidiary, form a limited liability partnership under UK law, set up a branch office, or appoint a UK agent or representative. It is not clear whether less formal “presence” will suffice, and the draft guidance and pending consultation do not directly address this point. The Bribery Act may therefore apply to foreign companies with very limited presence or operations in the UK—even if the predicate bribery offence takes place in a third country, involves non-UK nationals and is unrelated to UK operations. If, for example, a US parent company has a UK branch and its sales agent in Asia engages in bribery in Asia as defined in the Bribery Act, that US company may well have exposure under the Bribery Act. It could potentially be prosecuted in the UK for failing to prevent bribery, even if those acts do not violate the US Foreign Corrupt Practices Act (e.g., a facilitation payment) and were done solely on behalf of the US parent and not for the benefit of the UK branch or its business.
Managing officers need to keep in mind that they could be personally and individually liable under the Act for offences committed by the organization if any part of the offence has taken place in the UK and if they have consented to or merely turned a blind eye to the commission of the main bribery offences, such as bribery of a foreign public official. If no part of the offence takes place in the UK, it appears they will be personally liable only if they have a “close connection” with the UK, hold a British passport or are ordinarily resident in the UK.2
What do non-UK companies need to do? As discussed in our previous articles, the only defence available to commercial organisations who are charged with the corporate offence of failing to prevent bribery will be for the organisation to establish that it had put in place “adequate procedures” to prevent bribery in connection with its business. Adequate procedures are not defined in the Bribery Act, but the draft government guidance and ongoing consultation suggests that compliance programs will be carefully scrutinised. Although the final guidance will not be issued until later this year or early next, in the meantime, all companies that do any business in any form in or connected with the UK will be well advised to take immediate counsel and carefully consider whether their current policies, procedures, systems, controls and training programmes will be compliant with the UK Bribery Act should it be applied to them or their affiliates and associates.