By Thomas Fox
The U.K. Bribery Bill, introduced in March 2009, is still on track to pass out of Parliament before the upcoming general election, expected to be in June. The Bribery Bill is a major shift in the U.K.’s overseas anti-corruption regime — and it goes even further than the FCPA.
Because so many U.S. companies have offices or operations in the U.K., or employ U.K. citizens in their world-wide operations, this legislation exposes them to new risks of prosecution.
Unlike the FCPA, the Bribery Bill has no exception for facilitation payments. It creates strict liability for the failure of a corporate official to prevent bribery, prohibits bribery not just of government officials but also private citizens, and has criminal penalties of up to 10 years prison per offense (not 5 years as under the FCPA).
The Conservative Party tried to introduce amendments that would have allowed facilitation payments “reasonable in amount,” “customary in the situation,” or the “only reasonable alternative in the situation.” Blogger Alan Holroyd reported that Clair Ward, the Parliamentary Under-Secretary of State for Justice, blasted the idea, saying the exceptions (which died in the debate) would have “driven a coach and horses through the policy objectives of the bill.”
There’s one affirmative defense for “adequate procedures.” The defense would allow a corporation to put forward credible evidence that it had adequate procedures (i.e., an effective compliance program) in place to prevent its people from committing bribery offences. The Secretary of State for Justice will be required to publish guidance on “adequate procedures” when the Bill becomes law. And the Government has signaled that it will work with the U.K. business community to develop compliance standards.
Thomas Fox is an attorney in Houston, Texas, specializing in FCPA compliance, risk management and international transactions. He can be reached at [email protected]
More information about the Bribery Bill can be found here.
Just to say – the UK election is now scheduled for May 6th. So the schedule for passing the law is tighter than this post says. the Tories are still pushing their amendments. whether they are included will depend on negotiations in the "wash-up" – the period between when the election is called and parliament is dissolved when the parties decide what they are going to allow through and what they are going to drop.
The situation is far from ideal because everything, obviously, is now highly political; the merits/demerits of the bill are lost in partisan bickering; and the Tories have maximum leverage. they have an incentive to pass the law, because they don’t want to be seen as weak on bribery – but they also want to maintain good relations with the business lobby, which quietly opposes aspects of the bill.
See transparency international’s UK web site for up-to-date briefings (it refrains from getting party political though)
It’s true that the bill is a strong one that sends the right type of zero-tolerance message. but much will depend on enforcement. it’s questionable, given their wrecking tactics, whether the Tories will get as tough as labour might. despite the flap over BAE, it has done a good job beefing up the Serious Fraud Office, and the bill itself is evidence of good intentions (though why it left it so late, I don’t know)
The Bill passed the wash-up – the procedure at the end of a Parliament in the UK where the parties try and work out what has enough consensus to survive. It now goes back to the House of Lords and there might be some debate on the new amendments. I understand though there is a real will to push this through.
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