Although the new UK Bribery Act 2010 (the "Bribery Act") is similar in many respects to the existing anti-bribery provisions of the US Foreign Corrupt Practices Act of 1977 (as amended) ("FCPA"), overall, the Bribery Act is considered to be broader and more robust than the FCPA. With this in mind, we thought it would be useful to identify and highlight the principle differences between the two regimes, which are as follows:
- Private/Public – The FCPA focuses on acts of bribery relating to foreign governmental officials, whereas the Bribery Act is further reaching as it covers any form of bribery, i.e. bribery of private individuals as well as public officials.
- Receipt of Bribes – The Bribery Act not only bans the actual or attempted bribery of private individuals and public officials but also prohibits the receipt of bribes. The FCPA contains no such provision.
- Corporate Offence – The Bribery Act creates a new strict liability offence of failing to prevent bribery. Under the Bribery Act, companies will be liable if anyone acting under its authority commits a bribery offence. Such persons can include employees, consultants, agents, subsidiaries and joint venture partners. The only defence is where a company has adequate procedures in place to prevent bribery offences. The FCPA does not contain any strict liability offences. It is important to note that this corporate offence has extra-territorial application and applies not only to UK corporate entities, but also to overseas companies who carry on business in the UK (even where it may do so in limited circumstances and would include a branch or representative agent or office).
- Criminal Penalties – The Bribery Act has more severe criminal penalties than the FCPA. Whilst the Bribery Act allows UK prosecutors to impose an unlimited fine and a prison sentence of up to 10 years, the FCPA provides for company fines of up to $2 million per violation of the FCPA and fines of up to $250,000 on individuals per violation, as well as up to 5 years imprisonment. With wilful violations of the Books and Records and Internal Control provisions resulting in fines to companies of up to $25 million and imprisonment of up to 20 years for individuals, the US provisions are, however, still pretty severe!
- Facilitation Payments - The FCPA has a specific exception for low level facilitation payments where payments are made which are lawful under written law of the local country or reasonable and bona fide expenditures relating to a contract. The Bribery Act has no such exception.
The Bribery Act is far reaching as a result of its extraterritorial application. An offence under the Act does not need to take place within the UK and non UK companies are covered by the Act if they have a UK office, operate in the UK or employ a UK resident. Simply having a UK presence will create jurisdiction. Therefore US companies with UK offices, or those who employ UK citizens should amend their current corruption policies to take account of the Bribery Act. Similarly, UK companies who are aware of the FCPA should bear in mind that the provisions are not the same and the penalties for violation of the Bribery Act are more severe.