The new UK Bribery Act 2010 not only introduces tough new anti-bribery laws, but creates a new corporate offence of "failure of commercial organisations to prevent bribery" – meaning that a company carrying on business in the UK could be prosecuted for acts done by foreign employees, agents or subsidiaries in other countries, and without their permission.

Unlike US and Australian laws, the new UK bribery offences pertaining to the bribery of foreign public officials do not permit facilitation payments. Indeed, it is not even necessary to have an "improper purpose" to commit an offence.

The Bribery Act is part of the UK government's foreign bribery strategy, launched by the Lord Chancellor Jack Straw in January 2010. The new UK law, together with the recent significant increases in Australian penalties for bribery of foreign public officials, reflect an increasing level of co-operative international enforcement of anti-corruption laws.

This means that if you haven't recently reviewed your internal compliance measures to prevent bribery, then you should - and fast.

What are the acts by individuals that are now offences under the Bribery Act?

Briefly, the new Bribery Act criminalises the offering, promising, giving, or taking of a financial or other advantage if the offeror intends to induce or reward a person for improper performance of certain activities or functions. It's also an offence if the offeror knows or believes that the acceptance of the advantage would itself amount to improper performance.

The sorts of activities or functions are:

  • any function of a public nature,
  • any activity connected with a business,
  • any activity performed in the course of a person’s employment,
  • any activity performed by or on behalf of a body of persons (whether incorporated or unincorporated).

and there's an expectation that they are performed impartially, in good faith, and by someone in a position of trust.

It doesn't matter if

  • the activities or functions have no connection with the UK or are performed outside the UK; or
  • the local view is that these activities or functions don't have to be performed impartially or in good faith - only what a reasonable person in the UK would expect (unless the local view is enshrined in a written law).

These are only offences if the individual committing them is a British citizen or resident (or similar), or a company incorporated in the UK.

In this respect, the Act consolidates much of the existing UK law in relation to bribery. However, when it comes to acts of bribery is directed at a foreign public official the bill expands the law in several important respects.

First, it doesn't matter whether it was done with an improper purpose or an intention that the official exercise his or her powers improperly. All that is required is an intent to influence.

Second, the offence of failing to prevent these acts has no territorial limitation.

The new corporate offence of failure to prevent bribery

Under section 7 of the Bribery Act, a commercial organisation is guilty of failure to prevent bribery if a person associated with the commercial organisation bribes another person intending:

to obtain or retain business for the commercial organisation, or to obtain or retain an advantage in the conduct of business for the commercial organisation. It doesn't matter if the associated person is a British citizen who could be prosecuted for the offence or not, meaning that a company with a jurisdictional link to the UK could be prosecuted for something that a non-British person did outside the UK.

But who are these people? An "associated person" is a person who performs services for or on behalf of the commercial organisation, which means it's not limited to employees.

The defence to the new corporate offence of failure to prevent bribery

If the commercial organisation can prove that it had in place "adequate procedures" designed to prevent persons associated with it from committing these acts, then it has a defence to the charge. What these "adequate procedures" are exactly is still unclear, although the Act says that the Secretary of State must publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing. So far, no guidance has been published. In this respect the UK legislation is very similar to its Australian counterpart, which makes corporations which do not have a "corporate culture" which prevented bribery and corruption criminally responsible for individual conduct.