Legislative update

In November 2008, the UK Law Commission published a report and draft bill recommending that the common law offence of bribery should be replaced with a Bribery Act. The purpose of the bill is to consolidate the law on bribery and corruption in the UK.

It is anticipated that the Bribery Bill will receive Royal Assent before the next general election, with the general offences coming into force in June 2010 and the corporate offence of failing to prevent bribery coming into force in October 2010.

Summary of proposed offences

  • Promising or offering a bribe.
  • Requesting, agreeing to receive or accepting a bribe.
  • Bribing a foreign public official.
  • Corporate offence of failing to prevent bribery in the UK or overseas by persons associated with its business. This is subject to a complete defence if the organisation can prove that it has "adequate procedures" in place designed to prevent bribery.

Other main provisions include:

  • Territorial application: to prosecute for bribery committed abroad by persons closely connected with the UK.
  • A maximum of 10 years' imprisonment for all offences and corporate failure will carry an unlimited fine.

Adequate procedures

"Adequate Procedures" are not explained or defined in the Bribery Bill. However, factors to be taken into account include the size of the organisation, the nature of the business, the anti-bribery policies and training programmes and whistle blowing procedures within the organisation. Evidence of compliance will be very important.

High profile cases

  • In February 2010, without making any admission, BAE Systems agreed to pay £287 million in fines following the Serious Fraud Office's allegations of overseas corruption.
  • Three former senior executives of Alfred McAlpine Slate were recently ordered to pay almost £250,000 in confiscation.
  • In September 2009, Mabey & Johnson were ordered to pay £6.6 million following corruption charges.
  • In January 2009, the Financial Services Authority fined Aon £5.25 million for failing to establish and maintain effective systems and controls to counter bribery and corruption overseas.

US Companies - points to consider

US companies will need to be ready to enact changes to their US Foreign Corrupt Practices Act (FCPA) compliance programmes to incorporate the required changes if they have UK subsidiaries or business operations.

The legislation is far-reaching, covering both UK citizens and companies and also non-UK companies with any UK presence. Where a non-UK company has a UK office or operation or employs UK citizens it may also be subject to the legislation. An offence of bribery in an unrelated jurisdiction could still lead to prosecution in the UK if a non-UK company has a UK presence.

Contrast with the US Foreign Corrupt Practices Act (FCPA)
 

The Bribery Bill is broader and more stringent in respect of anti-bribery than the FCPA, with stricter penalties available to UK prosecutors than those available in the US. Senior company officials who are considered to have consented to or to be part of a bribery scheme are also liable as individuals.

The key differences between the anti-bribery provisions of the FCPA and the Bribery Bill are summarised in the table below

Click here for table.