The Bribery Act 2010

In some international markets, corruption is said to be so endemic that doing business is only possible when bribes are paid. In the past such payments may have been routinely factored into the business costs of a transaction, but there is now a serious need to consider the drastic consequences of so doing, bearing in mind recent legal developments.

The new Bribery Act was recently passed by the United Kingdom Parliament and received Royal Assent on 8th April 2010. Various provisions of the Act will come into force over the next few months.

The new Act has a number of changes over previous legislation (Common Law and the Prevention of Corruption Acts 1889-1916), creating:

– two general offences of bribing another person (section 1) and being bribed (section 2),
– a discrete offence of bribing a foreign public official (FPO) (section 6) and
– a new offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf (section 7) although a defence can be offered if the organisation has adequate procedures in place to prevent bribery.

Norton Rose International Legal Practice (www.nortonrose.com/knowledge) have just issued a publication called “The new Bribery Act: implications for your business in Asia” which is an excellent source of information about the implications of the new Bribery Act and well worth a read.

What is interesting is that a British citizen residing in (Asia for example) and working for an Asian company who engages in acts of bribery in Asia, will be criminally liable in England under the new provisions.

Furthermore, because the new Bribery Act has amended the UK Serious Crimes Act 2007, making it an offence to encourage or assist the commission of the general and discrete bribery offences, it is now possible, for example, for an organization to be criminally liable in England if it becomes aware of and facilitates the bribery carried out by its clients in other parts of the world. When you add in the stringent reporting obligations under various anti-money laundering laws, including the UK Proceeds of Crime Act 2002, then the need to ensure that procedures are in place to prevent such offences taking place becomes rather important.

It needs to be mentioned that the new Bribery Act is even tougher than the US Foreign Corrupt Practices Act (FCPA) by being more wide ranging, targeting foreign and domestic corruption in both public and private sectors; imposing criminal liability on both the giver and recipient of the bribe and not giving any exceptions for facilitation payments.

The only defence available to this corporate offence is to have procedures in place and guidelines on such procedures are due to be handed down by the UK Secretary of State over the next few months. However, to rely on the defence, the defendant would need to show that bribery took place in spite of perfectly adequate procedures in place.

Maria Narancic from Point to Point Export Services is an independent international trade adviser who assists organisations world wide with their international trade projects, documentation, Documentary Credits and import/export training.  She is based in the United Kingdom.  If you require any further assistance with the matters mentioned above, please do contact us by e-mail on info@point-point.com or check out other international trade articles on the Point to Point Export Services website at www.point-point.com
 

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