The UK Bribery Act is finally due to come into force on 1 July 2011. Section 7 of the Act establishes a corporate strict liability offense for failure to prevent bribery. The only defence to be recognized is that an affected commercial organisation has in place "adequate procedures" to prevent bribery by its own employees as well as potential illegal activities of those associated with it.
Our previous articles have discussed in detail the Bribery Act itself, the new strict liability offence which can potentially render any company that does any business in the UK criminally liable for failing to prevent bribery, and the potential defence available for the company that can establish that it had adequate procedures in place to "prevent," not simply to minimise or detect, bribery.1 This article is a reminder that any company that conducts any business in the UK should by now have at least considered whether its worldwide operations are at risk for bribery. It should also have under consideration reasonable policies and procedures to address perceived exposure, and have made a determination whether a specific compliance programme may be required.
It is likewise best to keep in mind that the Bribery Act is quite broad, and in several respects much broader than the US Foreign Corrupt Practices Act (“FCPA”). Specifically:
- It will be an offence to give or receive a bribe, or to promise, offer, request or agree to receive a bribe.
- It will be an offence to bribe a foreign official, but the Act is not confined to public officials.
- Commercial bribery is also now criminalized. Both the private and public sectors are covered.
- Differing from the US FCPA, facilitation payments are prohibited.
- Again, unlike the FCPA, there is no statutory defence for small or customary gifts and hospitality, only a signal that prosecutorial discretion will be applied; and, therefore, judgment, oversight and transparency are required for all payments to establish their reasonableness in amount and timing in the specific business context.
- A new strict liability corporate offence will apply to commercial organisations that fail to prevent bribery by persons associated with the organisation. The only defence will be to show that the organisation had in place "adequate procedures" to prevent such bribery.
- The UK courts will have jurisdiction over offences committed outside the United Kingdom.
- The maximum penalty for individuals can be 10 years' imprisonment or a fine, or both.
- The maximum penalty for a corporate entity can be an unlimited fine.
- Collateral consequences may be associated with a conviction under the Act such as director disqualification, debarment from public procurement, civil asset confiscation and potential liability for money laundering offences under the Proceeds of Crime Act 2002.