The Bribery Act 2010
Bribery – no longer a ‘conventional’ way
of doing business
TELFA CONFERENCE AND GLOBAL LAW
FORUM IN CONJUNCTION WITH USLAW
MOSCOW
7 June 2013 – 9:30am to 12 noon
Richard Isham
Wedlake Bell LLP
London
Road map
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Background
What the Act does – the new offences
Prosecution, penalties and other sanctions
Extra-territorial application
MoJ guidance
• Corporate hospitality
• Corporate offence
• Facilitation payments
• The six principles governing adequate bribery prevention
procedures
• Compliance - The nine step plan
Background
Dec 1998
UK ratified OECD Bribery Convention
Nov 2009
Bribery Bill introduced into parliament
8 Apr 2010
Bribery Act 2010 receives Royal Assent
Mar 2011
MoJ Guidance on adequate procedures and Joint
Prosecution Guidance issued
1 Jul 2011
Bribery Act 2010 comes into force
What the Act does
The Act creates:
• Two general offences of bribery:
• giving a bribe (active bribery); and
• receiving a bribe (passive bribery)
• A new offence of bribing a foreign public official
• A new corporate offence of failing to prevent bribery by an
employee or agent
Offering a bribe – ‘P’
P will be guilty if he:
• offers
• promises, or
• gives an advantage (financial or otherwise)
to another (R) intending to induce R to bring about the
improper performance of a relevant function or activity
Receiving a bribe – ‘R’
R will be guilty if he requests, agrees to receive or accepts a financial or
other advantage:-
• intending that he or another should improperly perform a relevant
function or activity (case 1)
• where R’s request, agreement or acceptance itself constitutes the
improper performance (case 2)
• as a reward for the improper performance by R or another (case 3)
• where R (or another at R’s request or with R’s assent or
acquiescence) improperly performs a function or activity in anticipation
of or in consequence of such a request, agreement or acceptance
(case 4)
Bribing a foreign public official – ‘FPO’
Only relates to active bribery and requires the intention of
P to:-
• influence the FPO in his/her capacity as a foreign
public official; and
• obtain or retain a business or other advantage in the
conduct of business
Senior officer liability
• If one of these offences (offering or receiving a bribe or
bribing a FPO) is committed by a company with the
consent or connivance of a senior officer of the
company, both the senior officer and the company may
be guilty of the offence
• Includes directors, managers, secretaries or other
similar officers
Failure of a commercial organisation to prevent
bribery
• Committed if a person ‘associated’ with a commercial
organisation (C) bribes another with the intention to:-
• obtain or retain business for C; or
• obtain or retain an advantage in the conduct of
business for C
• C’s only defence: adequate bribery prevention
procedures
Prosecution and penalties
• Serious Fraud Office (SFO) – main prosecutor
• If convicted of offence of offering or accepting a bribe or
bribing a FPO:
• individuals - imprisonment of up to 10 years, an
unlimited fine or both
• company - unlimited fine
• If convicted of offence of failure to prevent bribery
• unlimited fine
Other sanctions
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Proceeds of Crime Act
Public Contracts Regulations 2006
Directors’ disqualification
Fraud Act 2006
FCA (formerly FSA) Principles for Businesses
Companies Act 2006
US Foreign Corrupt Practices Act 1977
Extra-territorial application
• Active and passive bribery and bribing a FPO is
committed if any part of the of the offence takes place in
the UK
• For offences committed outside the UK, a senior officer
can be guilty if he has a close connection
• C can be guilty of the corporate offence of failing to
prevent bribery irrespective of whether the acts or
omissions take place in the UK or elsewhere
MOJ guidance – Corporate Hospitality
• Proportionate hospitality is lawful
• Arranging hospitality and not attending it yourself equals a
red flag
• The prosecution have to show the hospitality was
intended to induce conduct that amounts to a breach of an
expectation that a person will act in good faith, impartially
or in accordance with a position of trust
MOJ guidance – Corporate offence (1)
• What is a ‘commercial organisation’?
• UK entities
• non-UK entities that ‘carry on business or part of a
business’ in the UK
MOJ guidance – Corporate offence (2)
• Who is an ‘associated person’?
• Performance of services for or on behalf of the
commercial organisation
• Supply chain / project with several subcontractors?
• Joint ventures?
MOJ guidance – Facilitation payments
• Prohibited
• No defence for de minimis payments
• Joint prosecution guidance → prosecutors will be
guided by public interest considerations
The six principles governing adequate
bribery prevention procedures
1. Proportionate procedures
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication (including training)
6. Monitoring and review
Compliance – The nine step plan
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Board resolution
Compliance director/manager or committee
Risk assessment
Develop a code of ethics, policies and procedures
Train the workforce on the code, policies and obligations under the
Act
Amend contracts of employment, handbook, disciplinary and
whistleblowing procedures
Have robust monitoring and reporting systems
Due diligence procedures and checks
Review terms of business
Some of the major differences between
the Bribery Act and the FCPA
Bribery Act 2010
FCPA
Covers corruption in a private to private Applies only to bribery involving foreign public
commercial context, not just where a foreign officials.
public official is involved.
Covers both active and passive bribery.
Only covers active bribery involving foreign
public officials.
The offence of bribery of a foreign public Requires intent to induce the foreign public
official does not require that the person was official to do or omit an act in violation of his
trying to induce the foreign public official to lawful
perform improperly.
duty,
or
to
secure
an
improper
advantage.
Commercial organisations commit an offence There is no specific offence under the FCPA
if they fail to prevent bribery; so do ‘senior for failing to prevent bribery but companies
officers’ if they consent or connive.
may be vicariously liable for acts of their
employees and agents regardless of their
level.
No
defence
for
legitimate
promotional Affirmative defence for legitimate promotional
expenses and facilitation payments.
expenses. Facilitation payments permitted.
The Bribery Act 2010 - “Bribery – no longer a
‘conventional’ way of doing business”
Richard Isham
Wedlake Bell LLP
[email protected]
+44 (0)20 7395 3133
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© Wedlake Bell LLP 2013. All rights reserved.
This document is for general information only and does not seek to give legal advice or to be an exhaustive statement of the law. Specific
advice should always be sought for individual cases. This reflects the law as at the date of publication June 2013.