On March 30, 2011, the British Ministry of Justice released its much-awaited guidance ("Guidance") for commercial organizations subject to the Bribery Act 2010 ("Act"), a sweeping restructuring of United Kingdom bribery law. The Act, which will go into force on July 1, 2011, poses potentially substantial risks to any company that "carries on business" in the United Kingdom. The Guidance provides important color on how the Act will be applied and how companies may guard against prosecution.
The Act itself replaces the UK's assorted bribery laws with a comprehensive set of four punishable offenses. Two general offenses cover variations on active and passive bribery, respectively, the offering and accepting of a financial or other advantage. (§§ 1-2). A third standalone offense exists for bribing a foreign public official for a business purpose. (§ 6). Most significantly, the Act creates a new attribution offense that imposes liability on a business for failing to prevent "associated persons" (see below) from committing any of the previous offenses for the organization's benefit. (§ 7). This offense has no analogue in the Foreign Corrupt Practices Act ("FCPA"). Notably, however, a full defense to this attribution offense is available by showing that adequate anti-bribery procedures were maintained when an associated person committed bribery. (§ 7(2)).
Moreover, the Act provides far-reaching jurisdiction for prosecution. (§ 12). If any part of an offense violating §§ 1, 2, or 6 occurs in the UK, or if any part of an offense is committed abroad by a person with a "close connection" to the UK, prosecutors may act. For the attribution offense, a commercial organization that is formed or incorporated in the UK, or that carries on business in the UK, may be subject to prosecution regardless of where any part of the offense took place.
Significant takeaways from the recent Guidance include:
A "common sense approach" will govern both the identification of whether a UK organization is "carrying on a business" and whether a foreign organization has a demonstrable UK business presence to make it subject to the Act, with the courts as the final arbiter of these questions. Listing on the London Stock Exchange or having a UK subsidiary is not, by itself, sufficient to do so. (pp. 15-16; ¶¶ 35-36). In contrast to the FCPA, the use of facilitation payments to secure routine government action may constitute a bribery offense. (p. 18; ¶¶ 44-45). Hospitality...