UK Bribery Act 2010 – the international dimension
The Bribery Act 2010, which is due to come into force later this year, has international business and activities firmly in its sights. Practitioners who are used to the wide geographical scope of US legislation such as the Foreign Corrupt Practices Act may be surprised by the extent to which, under the Act, the UK courts will seize jurisdiction over offences committed abroad. This article looks in detail at the international dimension to the Act.
To recap, the Act creates four main criminal offences:
Offence 1 – bribing another person
Offence 2 – accepting a bribe
Offence 3 – bribing a foreign public official
Offence 4 – failure of a commercial organisation to prevent bribery
The first area of international reach is that the Act covers bribery and attempted bribery anywhere in the world. Under the Act, bribery means attempting to gain an advantage by corrupting the exercise of a function or activity, but the function or activity need not have any connection whatsoever with the UK and the attempt to corrupt it can take place anywhere in the world.
The second area is the application of the Act to foreign public officials, which includes officials or agents of public international organisations such as the UN. Bribing a foreign public official to obtain business or an advantage in business is an offence in itself.
One qualification at this point: if the bribery occurs overseas, an individual can only be guilty of Offences 1-3 if they have a close connection with the UK. "Close connection" means having British citizenship or nationality, or being ordinarily resident in the UK, or being either incorporated in the UK or a partnership in Scotland. The test for ordinary residence is likely to be that used in UK tax law, which may mean that non-UK nationals who are ordinarily resident for tax purposes can be caught by the UK courts for acts of bribery committed outside the UK.
The "close connection" test also applies to senior officers of companies who consent to or connive at bribery committed overseas – some relief, then, as successful prosecution can lead to up to 10 years in prison.
But the third area of international application is the one in which non-UK businesses and practitioners should be most interested. Companies can be prosecuted in the UK for Offence 4, "failure to prevent bribery", even if the bribery occurred outside the UK. All that is required is that the company:
- is incorporated in the UK or
- carries on business in the UK or
- is in a partnership formed under UK law or
- is in a partnership formed under any other law which carries on business in the UK
It goes further still – in the context of Offence 4, the bribery that a company fails to prevent can be committed by any person that performs services for it and this can include:
- individuals, such as an employees, who in this context do not need to have a "close connection" with the UK
- subsidiaries, whether in the UK or not and
- agents, whether in the UK or not.
The geographical extent of the "failure to prevent" offence is therefore extremely wide. This was the deliberate policy of the lawmakers when the Act was being drafted. According to the Serious Fraud Office (SFO) – the organisation that will determine whether many of the most serious cases are prosecuted – too many corporates with links to the UK have escaped prosecution for bribery because of the weakness of UK law in this area. The SFO seems to be on something of a mission to set an example to international businesses by bringing to court the first case in which such a business is prosecuted in the UK for bribery committed abroad.
It is a defence to Offence 4 to have "adequate procedures" in place to prevent bribery and any organisation that carries on business in the UK should ensure that its existing anti-corruption procedures are strong enough to make out the defence.
Blair Adams
Partner
Shepherd and Wedderburn LLP
July 2010
This article contains general information about the law and does not constitute legal advice.
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