Inside Experts: The UK Bribery Act and electronic disclosure practices
Companies need to ensure compliance.
July 15, 2011 at 11:14 AM
7 minute read
The original version of this story was published on Law.com
For the past decade or so, the UK has been criticized for its Laissez-faire attitude toward commercial bribery, particularly due to its glaring gap in enforcement legislation. As of July 1, the UK “Bribery Act 2010” went into effect, and in many ways it leapfrogs the 34-year-old American equivalent—the Foreign Corrupt Practices Act (FCPA).
While ostensibly similar, the Act differs from the FCPA in a number of ways, many of which broaden applicability. For example, unlike the FCPA, the Act covers bribes to both the public and private sectors, and does not make an exception for facilitation payments (small payments given to public officials to speed up a routine service). Similarly, the Act applies to all organizations that do business in the UK, even if they're not based there, and even if the bribery occurs in another country.
There are essentially four key offenses under the Act:
- Active bribery or offering bribes (Section 1)
- Passive bribery or accepting bribes (Section 2)
- Bribery of a foreign public official (Section 6)
- A company's failure to prevent bribery (Section 7)
The Bribery Act originally was scheduled to become effective in October of last year but, after numerous delays and outcries from the business community, the Ministry of Justice recently issued its “Bribery Act 2010: Guidance,” and announced that the Act will finally take effect July 1. This Guidance has been eagerly awaited by anxious enterprises given the extremely broad scope of the Act. In concert with the recently promulgated prosecutorial guidelines, the guidance documents give some insight into how UK prosecutors (as enforced by the Serious Fraud Office) will initially decide whom to pursue and then how the Act will be applied. Fortunately, the promulgated guidance documents suggest that the Act is “directed at making life difficult for the mavericks responsible for corruption, not unduly burdening the vast majority of decent, law-abiding firms.”
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