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17. the UK Bribery Act 2010 and Its Implications for Businesses

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17. the UK Bribery Act 2010 and Its Implications for Businesses 17. The UK Bribery Act 2010 and its implications for businesses John Rupp, Robert Amaee and Ian Redfearn , Covington & Burling LLP alone to constitute carrying on a business or part In the first two circumstances, it does not matter of a business in the UK. But it notes that the “final whether the person to whom the advantage is arbiter, in any particular case, will be the [UK] offered, promised or given is the same as the There was a time in the not so distant past when bribed and bribing a foreign public official can be courts”, and Richard Alderman, the former director person who is being induced to perform or the US Foreign Corrupt Practices Act was the only committed by any individual or commercial of the Serious Fraud Office (SFO), the UK’s lead rewarded for performing a relevant function or game in town for prosecuting those who bribed organisation if an act or omission forming part of anti-bribery enforcement authority, declared that activity improperly. In each case, the advantage foreign government officials. Although many other the offence takes place in the UK. the SFO would not be impressed with “overly may also be offered, promised or given through a countries had criminalised such conduct, many technical interpretations” of the Bribery Act. third party. others had not — and most of the anti-bribery If that jurisdictional test is not satisfied, the laws on the books of countries other than the US Bribery Act nonetheless may be triggered if any of The Adequate Procedures Guidance is not binding The term ‘relevant function or activity’ is defined were not enforced. those involved in the bribery are found to have a on either the SFO or the UK courts, and the SFO broadly in Section 3 of the Bribery Act to include ‘close connection’ to the UK. British citizens, has discretion to decide which cases it wishes to any function of a public nature, any activity One of the most striking developments of the past British nationals, individuals ‘ordinarily resident’ in prosecute. As the Adequate Procedures Guidance connected with a business, any activity performed few years has been the extent to which countries the UK, UK-incorporated companies and UK points out, the courts will be responsible for deciding in the course of a person’s employment, and any other than the US have increased their partnerships are all deemed to have that ‘close whether a commercial organisation falls within the activity performed by or on behalf of a body of P o investigation and prosecution of domestic and connection’ to the UK. scope of the Bribery Act. For the time being, persons (whether corporate or incorporate). s t foreign bribery in both the public and private therefore, a prudent company with a listing on the - I sectors. Although there was a debate in the UK The offence of failing to prevent bribery, which London Stock Exchange would be well advised to The person performing the relevant function or P more than a decade ago about the extent to which applies only to commercial organisations, has an assume that it is subject to the Bribery Act, at least activity must be expected to do so in good faith O UK law prohibited bribery outside the UK, that even broader jurisdictional reach. While that until such time as the courts rule to the contrary. or impartially or be in a position of trust by virtue c o debate was settled by the entry into force of the offence can obviously be committed by commercial of performing it. A relevant function or activity n s Anti-Terrorism, Crime and Security Act 2001 in organisations incorporated or formed in the UK, it Offences may be performed outside the UK, however, and i that year. The patchwork of applicable laws and a also can be committed by commercial it is not necessary for it to have a connection to d e number of other factors nevertheless discouraged organisations incorporated or formed outside the General offences the UK. r a prosecutions — in particular, prosecutions for UK if the commercial organisation is carrying on a t i bribery outside the UK. business, or part of a business, in the UK. Bribing another person A person will be deemed to have performed a o n A person commits an offence under Section 1 of relevant function or activity ‘improperly’ if he or s The UK Bribery Act 2010, which came into force on The Adequate Procedures Guidance published by the Bribery Act if he or she offers, promises or she performed it in breach of a ‘relevant July 1, 2011, is a powerful new tool for prosecuting the Ministry of Justice recommends that non-UK gives a financial or other advantage to another expectation’ — that is, an expectation that it bribery within and outside the UK in the public and companies and partnerships take a common- person and he or she: would be performed in good faith or impartially — private sectors. The Bribery Act reformed the sense approach to deciding whether they are or if the person failed to perform the relevant criminal law of bribery in the UK, simplified the ‘carrying on a business, or part of a business’, in l intends the advantage to induce a person to function or activity, which in itself would constitute process for prosecuting bribery offences, and the UK. The guidance suggests that a non-UK perform a relevant function or activity a breach of a relevant expectation. provided for increased penalties for those who are organisation would need to have a demonstrable improperly; convicted of such offences. Although only one business presence in the UK to be covered by the l intends the advantage to reward a person for The relevant expectation will be assessed by prosecution under the Bribery Act has been Bribery Act. the improper performance of a relevant reference to what a reasonable person in the UK completed so far, it should be on the radar of all UK function or activity; or would expect in relation to the performance of the commercial organisations, as well as all commercial There has been some debate about whether a l knows or believes that acceptance of the relevant function or activity. If performance of the organisations that do business in the UK. listing on the London Stock Exchange would in advantage would constitute improper function or activity is not subject to English, itself mean that a company has a ‘demonstrable performance of a relevant function or activity. Scottish or Northern Irish law, local customs or Jurisdictional reach business presence’ in the UK. The Adequate practices must be disregarded unless they are The Bribery Act has broad extra-territorial effect. Procedures Guidance states that the UK References in this chapter to ‘persons’ include expressly permitted or required by the written law The offences of bribing another person, being government does not expect a securities listing both natural and legal persons. of the country concerned. Page 128 The UK Bribery Act 2010 and its implications for businesses The UK Bribery Act 2010 and its implications for businesses Page 129 Being bribed l he or she, directly or through a third party, An ‘associated person’ is one who performs Increasingly, the UK courts are taking a hard line A person commits an offence under Section 2 of offers, promises or gives a financial or other services for or on behalf of a commercial against senior officers who are complicit in the Bribery Act if he requests, agrees to receive or advantage to a foreign public official or to organisation that is subject to the Bribery Act. corruption. In sentencing three former executives accepts a financial or other advantage: another person at the request of, or with the When assessing whether a person is performing of a company that had engaged in bribery, one assent or acquiescence of, the foreign public services for or on behalf of a commercial judge said in 2011: “When a director of a major l intending as a consequence for a relevant official; and organisation that is subject to the Bribery Act, company plays even a small part [in a bribery function or activity to be performed l the foreign public official is neither permitted prosecutors and the courts must take into account scheme], he can expect to receive a custodial improperly (whether or not by the same nor required by the written law applicable to the circumstances informing the relationship sentence.” person who requested, agreed to receive or him or her to be influenced in his or her between the person and the commercial accepted the advantage); capacity as a foreign public official by the organisation. They would consider, among other Implications for public procurement l when the request, agreement or acceptance offer, promise or gift. factors, the degree of control that the UK The Public Contracts Regulations 2006 (the would constitute improper performance of a commercial organisation exercised over the non- Regulations) prevent public authorities from relevant function or activity; or The term ‘foreign public official’ is defined UK person who actually offered, promised or paid selecting as a contractor any commercial l as a reward for improper performance of a broadly in the Bribery Act to include any the bribe. organisation that has been convicted of bribing relevant function or activity. individual who: another person in violation of Section 1 or bribing It is a defence to Section 7 for a commercial a foreign public official in violation of Section 6 of P o It does not matter whether the person requests, l holds a legislative, administrative or judicial organisation to prove that it had adequate the Bribery Act.
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