UK upgrades its tools in fight against corruption with Bribery Act 2010
The Bribery Act 2010 received the Royal Assent as part of the "wash up" procedure that allows bills before parliament at the time of dissolution to become law where all parties are satisfied that the legislation is fit for purpose. It is not yet in force and is unlikely to be so for some time during the hiatus caused by the General Election and the range of underlying issues that need to be resolved before it can be fully introduced.
The new Act brings in a much simplified approach to proving bribery and represents what the sponsoring Government Minister referred to as a "gold standard" piece of legislation which is more onerous than that of most other countries around the globe, including those who are signatories to the OECD convention.
As well as being a significant departure from the previous law, it also risks criminalising much behaviour which would previously have been thought entirely acceptable.
The offence of bribery of a foreign official may seem at first blush to be a marginal restatement of the primary bribery offence but is in fact a substantially easier offence to prove and the conduct required to commit the offence is hardly distinguishable from normal business practice.
The offence requires the briber to intend to influence the receiver in his official capacity with a view to obtaining or retaining business or an advantage in the course of business. Every businessman who travels abroad goes with the intention of influencing the target to obtain/retain business or get an advantage in the course of business; it is why he is there. The offence also requires that a financial or other advantage is promised or provided. This could potentially include provision of samples, marketing and other similar materials, hospitality. All normal business behaviour.
The only challenging issue for the authorities is that they must prove that the receiver "is neither permitted nor required by the written law applicable to [him/her] to be influenced in [his/her] capacity as a foreign public official by the offer, promise or gift."
Do you know many countries that have a written law permitting payments or other gifts to be provided to their public officials?
In terms, business will need to be aware of the "written applicable law" of the official's state. The Act limits this to "any written constitution, or provision made by or under legislation, applicable to the country or territory concerned, or any judicial decision which is so applicable and is evidenced in published written sources". It should be noted that custom and practice is not relevant, nor is the internal government policies for hospitality and entertainment (unless they are enshrined into law). As regards public international organisations like the UN or the Worldbank, their internal written rules are regarded as the "written applicable law" for that organisation.
Unless the written law of the country permits the advantage to be provided to the official (or someone else with his assent or acquiescence), the offence is committed.
The definition of public official is also very wide. During debates in Parliament, the most often quoted example was members of the medical profession in China who would be treated as public officials because of the nature of their employment.
Despite substantial debate about the issue of "facilitation" or "grease" payments these remain outlawed under UK law. The issue as to whether a case will be brought in respect of low level facilitation payments is left to prosecutorial discretion, never a happy place to be when deciding on an appropriate corporate policy. The issue is made more critical because of the inclusion in the Act of a provision which makes it an offence if a company fails to have adequate procedures for preventing bribery. Thus in a company where there is an acknowledgement that facilitation payments are unavoidable, they run the risk of committing this offence even where individuals may escape prosecution because the individual offences are so small.
The Act requires the government to produce guidance about what is to be regarded as adequate procedures but this is likely to be problematic for many reasons. What is adequate for a company of 100 people may well not be so for a multinational company with 100,000 people. Differing risks and issues arise in different business sectors. For example, the construction industry will have substantially different risks than the pharmaceutical industry. It remains to be seen how valuable the guidance is likely to be given the scope and range of issues the guidance would necessarily have to cover to be of real value.
During the passage of the bill there was considerable debate about the creation of a business advisory service, to provide targeted advice to companies wishing to be seen to be in compliance with law in this area. Once again the scope of the advice required makes such an undertaking much harder to deliver in practice than in principle.
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