The Bribery Act
Taking extra care, even overseas
By now most of us are familiar with the new offences brought in by the Bribery Act (the 'Act') which came into force on 1 July 2011. The four main categories of offences are:
- Section 1: Offer, promise or give a bribe to another person
- Section 2: Request, agree to receive or accept a bribe from another person
- Section 6: Bribe a foreign public official
- Section 7: Failure of a commercial organisation to prevent bribery
However what is not always fully appreciated is the wide territorial reach of the Act. It is well understood that offences under the Act will be prosecuted if the bribe takes place in the UK. However did you know that breaches of the Act can also be prosecuted in the UK even if the bribe takes place overseas? This guidance provides an overview of the international scope of the Act.
Offences under Sections 1, 2 and 6
Under section 1, 2 or 6 a person can be guilty of an offence if the act which forms part of the offence takes place overseas and the person committing the act has a close connection with the United Kingdom.
But what is meant by a close connection? The Act lists 9 instances where someone will be classified as having a close connection to the UK including British citizens, British overseas territories citizens and an individual who is ordinarily resident in the UK.
Overseas companies can also be prosecuted for the above offences if they are incorporated under the law in any part of the UK or if they are a Scottish partnership.
Offences under Section 7
The corporate offence of failure to prevent bribery is committed regardless of whether the act of bribery takes place in the UK or overseas. This part of the Act applies to any UK incorporated entity and any overseas entity that carries on a business or part of a business in the UK.
According to a recent report as many as one in four people in the world have paid a bribe. The Corruption Perceptions Index scores countries on how corrupt their public sectors are, and the 2015 top 100 includes several countries from Africa, South America and the Caribbean, as well as Russia and Bulgaria. Bribes are often paid in the line of business. In many countries it is seen as a way of life.
However given the long reach of the Act, if you or your company engages in bribery anywhere in the world you risk being prosecuted in the UK. For many individuals and companies who operate in countries where bribery is common, this is very concerning. UK authorities understand that in some situations being concerned in bribery may be unavoidable. Prosecutions will only transpire where it is deemed to be in the public interest.
But there are many incidents where bribery can be, and indeed should be, avoided. Below are two examples of cases where solicitors in our Business Crime team have been instructed to represent individuals who were charged with bribery and corruption offences in the UK.
Case 1: Ian Ryan, Head of Business Crime and Regulatory, represented the commercial director of an oil service company in corruption allegations involving one of the world's major oil companies. The director was one of six individuals prosecuted for bribery relating to payments made to secure contracts worth over USD $16,000,000.
Case 2: Kyle Phillips, associate in Business Crime and Regulatory, assisted in successfully representing a finance director of a company who provided manpower for the oil and gas industry in over 35 countries. The prosecution was brought by the SFO following allegations that employees of the company had paid bribes to tax officials in Nigeria to avoid, reduce or delay paying tax.
Individuals and companies should take extra care not to put themselves in a position where they are at risk of being involved in bribery.
Despite the warning signs it seems that many companies still do not have adequate procedures in place to prevent bribery. A "one-size fits all" bribery policy will often be less than adequate. The Government published guidance for commercial organisations to assist them, however many companies fail to adhere to this and as such their policies are inadequate.
It is our strong advice that companies spend time reviewing their bribery policies to ensure that they are fit for purpose. Any companies who conduct business in overseas countries where bribery is common place must ensure that they take extra care to ensure that their policies and compliance procedures do all that they can to prevent bribery occurring in their organisation.
In addition to this Government agencies such as the SFO are stepping up their efforts in their fight against bribery and corruption. An individual could face up to 10 years imprisonment if they are found guilty of being involved in bribery, and a company could face an unlimited fine. Furthermore the reputational damage to a company seen to be involved in bribery could be devastating.
You should contact our Business Crime team if you or your company:
- Are under investigation or being prosecuted for a bribery offence
- Have been contacted by the SFO for an interview under section 2
- Need advice on bribery policies
If you suspect that bribery has been committed by an employee or agent within your organisation then contact our Business Crime and Regulatory team for advice immediately. Our internal investigations team will assist you on how to proceed and if necessary, self-report.