Edward Craft. Julian Mathews Master Class in English Law Course part2. 07.06.2013


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Edward Craft. Julian Mathews Master Class in English Law Course part2. 07.06.2013

  1. 1. 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
  2. 2. Road map • 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
  3. 3. 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
  4. 4. 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
  5. 5. 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
  6. 6. 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)
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. Other sanctions • 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
  12. 12. 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
  13. 13. 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
  14. 14. 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
  15. 15. 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?
  16. 16. MOJ guidance – Facilitation payments • Prohibited • No defence for de minimis payments • Joint prosecution guidance → prosecutors will be guided by public interest considerations
  17. 17. 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
  18. 18. Compliance – The nine step plan 1. Board resolution 2. Compliance director/manager or committee 3. Risk assessment 4. Develop a code of ethics, policies and procedures 5. Train the workforce on the code, policies and obligations under the Act 6. Amend contracts of employment, handbook, disciplinary and whistleblowing procedures 7. Have robust monitoring and reporting systems 8. Due diligence procedures and checks 9. Review terms of business
  19. 19. Some of the major differences between the Bribery Act and the FCPA Bribery Act 2010 FCPA Covers corruption in a private to private commercial context, not just where a foreign public official is involved. Applies only to bribery involving foreign public officials. Covers both active and passive bribery. Only covers active bribery involving foreign public officials. The offence of bribery of a foreign public official does not require that the person was trying to induce the foreign public official to perform improperly. Requires intent to induce the foreign public official to do or omit an act in violation of his lawful duty, or to secure an improper advantage. Commercial organisations commit an offence if they fail to prevent bribery; so do ‘senior officers’ if they consent or connive. There is no specific offence under the FCPA for failing to prevent bribery but companies may be vicariously liable for acts of their employees and agents regardless of their level. No defence for legitimate promotional expenses and facilitation payments. Affirmative defence for legitimate promotional expenses. Facilitation payments permitted.
  20. 20. The Bribery Act 2010 - “Bribery – no longer a ‘conventional’ way of doing business” Richard Isham Wedlake Bell LLP risham@wedlakebell.com +44 (0)20 7395 3133 • © 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. The content of the presentation cannot be applied as legal counselling as this will always be subject to actual and specific knowledge of the client’s situation.