Taking another critical step in its efforts to fight corruption and bribery, on March 25, 2009, the UK government introduced draft legislation aimed at reforming their existing anti-bribery laws, which have been subject to direct and sharp criticism from the Organization for Economic Cooperation and Development’s (“OECD”) Working Group on Bribery (the “Working Group”).31 The draft legislation, in conformity with the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions,32 provides for the following three criminal offenses: (1) the offer, promise, and giving of a bribe, (2) the request, agreeing to receive, or the acceptance of a bribe, and (3) bribery of a foreign public official. A fourth criminal offense that is not provided for in the Convention, namely the negligent failure of a commercial organization to prevent bribery, is also included. The proposed legislation imposes severe penalties, including jail sentences of up to ten years for individuals, and unlimited fines for individuals and entities.33
Criminal liability under the proposed legislation may result if any element of the first three offenses takes place in England, Wales or Northern Ireland.34 If the conduct takes place outside of these jurisdictions, criminal liability will result if conduct, which would have been part of the offense had it been in these jurisdictions, was performed by a person with a “close connection with the United Kingdom.”35 Such persons would include British citizens, individuals ordinarily resident in any part of the UK, and entities incorporated under the laws of any part of the UK.
The criminalization of corporate negligence in preventing bribery, applicable to both domestic entities and international organizations doing business in the UK, is one of the most controversial components of the draft legislation. However, there is a proposed corporate defense pursuant to which an entity may be found to not be guilty if it has “adequate procedures” in place to prevent bribery, and if the bribery is not caused by a senior officer. Thus, UK companies — and other entities conducting business in the UK — should consider taking advantage of the lead time for the passage of this, or similar, legislation by implementing a compliance program designed to prevent bribery and other types of corruption. To do otherwise could subject the company not only to the penalties imposed under the draft legislation, but also, to the debarment provisions under the recent Public Procurement Directive (2004/18/EC) (the “Directive”) of the European Union (“EU”), which mandate the exclusion of suppliers convicted of corruption. 36
The UK’s introduction of draft legislation consistent with the requirements of the OECD Convention, follows three other recent landmark anti-bribery achievements by the UK, namely its first foreign bribery conviction, the first use of civil recovery powers to recover the proceeds of “payment irregularities,” and the imposition of a record fine by the Financial Services Authority for failure to establish and maintain systems and controls to prevent and detect bribery and corruption.