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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. MOJ guidance – Facilitation payments
• Prohibited
• No defence for de minimis payments
• Joint prosecution guidance → prosecutors will be
guided by public interest considerations
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. 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.
20. 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.
