It is well over a decade since the UK government started a consultation process as to the future form of the law controlling bribery. A Bribery Bill was put to Parliament in 2000 but, as a result of criticism as to its content, the Bill was never enacted. The latest Bribery Bill was introduced to Parliament in November 2009 and is now at the Committee stage. The Government is keen to ensure that the law is enacted before the General Election although there will be some delay before the law is put into force after enactment.
General bribery offences (clauses 1 to 5) – these offences cover active and passive bribery in the private and public sectors.
Bribery of foreign public officials (clause 6) – the offence deals only with active bribery and has been included to ensure there can be no criticism of the UK as to compliance with OECD Convention requirements.
Failure of a commercial organisation to prevent bribery (clauses 7 and 8) – this is a strict liability offence which contains a defence of having in place adequate procedures to prevent bribery.
There are no territorial limitations imposed on the UK prosecuting authorities in relation to the prosecution of UK corporates, partnerships, citizens or residents. Non-UK persons can be prosecuted for offences of bribery where a part of the offence takes place in the UK.
Fines – the maximum fine will continue to be unlimited.
Prison – the maximum term of imprisonment, per offence, will increase from 7 years to 10 years.
Possible concerns of those in business
Bribery of foreign public officials
- There is no requirement to prove that the person who paid the bribe "intended" to bribe.
- There is no specific exemption for a legitimate promotional expenditure, such as is contained within the US Foreign Corrupt Practices Act.
- There is no facility to obtain an official opinion as to the legitimacy of an action similar to the opinions issued by the US Department of Justice in relation to the Foreign Corrupt Practices Act, although it is expected that the Serious Fraud Office will continue to provide guidance to those involved in M&A transactions who have concerns that corruption overseas may have been committed by the target business.
Failure of commercial organisation to prevent bribery
- This is a strict liability offence which contains a defence requiring the corporate to show that it had in place adequate procedures designed to prevent persons associated with the organisation from undertaking bribes.
- The Government has recorded that non-statutory guidance as to what will amount to "adequate procedures" will be provided after the law has been enacted but prior to the law being enforced. This guidance is required to cover all types of commercial endeavour and as a result will be very general.
- The offence extends to bribes paid by those providing services to the corporate organisation, including joint venture partners, over which the corporate may well have limited controls over their behaviour.
- It is questionable whether under the EU Public Sector Directive the conviction of a corporate for failing to prevent corruption will result in debarment from involvement in public sector contracts given that the offence does not require any proof of "active" involvement in corruption and the debarment provision requires that the organisation be convicted of an offence of active involvement in corruption.
Offence of director/senior officer conniving or consenting to corruption by an offending corporate
- There is a specific offence that only applies to UK persons (natural and legal) of conniving or consenting to a commercial organisation which commits either the general offences of bribery or the offence of bribery of foreign public officials.
Client Alert 2010-009