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Kit Addleman Reviews International Business Implications of U.K. Bribery Act
U.K. Enacts ‘Far-Reaching’ Anti-Bribery Act
Britain’s new Bribery Act, which received Royal assent and whose implementation has now been indefinitely delayed until the government issues further guidance to business, extends far beyond the British Isles.
While the legislation overlaps significantly with the U.S. Foreign Corrupt Practices Act, it diverges in several important ways. For example, liability under the British legislation attaches no matter where the offence is committed so long as it’s perpetrated by a British resident, a corporation incorporated there or one that carries on any part of its business there.
But perhaps the most daunting aspect of the legislation is the new strict liability corporate offence of failing to prevent bribery on the part of persons associated with the company. This means that international businesses will have to consider the extent to which they must monitor the activities of subsidiaries or joint-venture partners.
“Traditionally, British law limits corporate criminal liability to circumstances in which a person who is the ‘directing mind’ of the company is guilty of the offence,” says Katherine Addleman, a partner at Haynes and Boone LLP in Dallas.
“The Bribery Act, however, broadens corporate liability by making a company liable to criminal prosecution if anyone associated with it pays a bribe in connection with any aspect of its business.”
Unlike its sister provision in the U.S. act, this strict liability offence attaches not only to large or unusual transactions but also to business as mundane as connecting a telephone line.
However that may be, the U.K. legislation allows companies to avoid liability by demonstrating the existence of adequate procedures to prevent bribery.
“The Bribery Act does not provide detailed guidance concerning what constitutes adequate procedures,” Addleman says. “But key issues likely to factor into the determination are a top-level commitment to anti-corruption efforts and the maintenance and enforcement of suitable policies concerning payments, gifts, due diligence of agents and consultants, and proper monitoring of relevant company activities.”
The upshot is that corporations will need to implement programs to prevent bribery. While the government has indicated it will issue guidance three months before the offence provisions come into force, all appearances are that it won’t be prescriptive.
Excerpted from Law Times. To view the full article, click here.