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Anti-bribery and corruption

Anti-bribery and corruption

Overview

The UK Bribery Act 2010 introduced a new era of “long arm” legislation targeting the increasingly complex governance and trading operations of corporate groups and their business associates (wherever located).

The penalties for non-compliance with the Bribery Act are potentially significant, particularly for companies which rely on government contracts - a ban on public procurement work, plus the associated reputational impact as well as hefty fines and possible contractual damages.

The UK enforcement agency, the Serious Fraud Office (SFO), has launched a number of high-profile and complex investigations into alleged criminal conduct, but has not to date secured many significant convictions under the flagship “failure to prevent” offence. The SFO has, by contrast, concluded several notable Deferred Prosecution Agreements (DPAs) for bribery offences, working both independently and in collaboration with enforcement bodies in other jurisdictions. Alongside the Bribery Act, the introduction of DPAs (the UK equivalent of widely-used Non-Prosecution Agreements in the US), as an alternative to a full-blown criminal prosecution, was designed to overcome some of the legal, practical and resourcing obstacles faced by prosecutors when seeking to hold companies to account, while encouraging transparency and engagement on the part of the accused. Companies which self-report suspicious activity and co-operate fully and openly with prosecutors may be rewarded with a DPA and a reduced penalty, rather than a high-profile and costly court action, which carries the threat of a corporate conviction.

The UK’s response to the enforcement of its anti-bribery and corruption measures is part of a co-ordinated global initiative. Increased use of DPA-style settlements, greater international co-operation and a wider scope of corporate liability have all been consistent themes in global anti-corruption efforts in recent years.


Key issues

The UK Bribery Act 2010 introduced a new era of “long arm” legislation targeting the increasingly complex governance and trading operations of corporate groups and their business associates (wherever located). The penalties for non-compliance with the Bribery Act are potentially significant, particularly for companies which rely on government contracts - a ban on public procurement work, plus the associated reputational impact as well as hefty fines and possible contractual damages.

The UK enforcement agency, the Serious Fraud Office (SFO), has launched a number of high-profile and complex investigations into alleged criminal conduct, but has not to date secured many significant convictions under the flagship “failure to prevent” offence. The SFO has, by contrast, concluded several notable Deferred Prosecution Agreements (DPAs) for bribery offences, working both independently and in collaboration with enforcement bodies in other jurisdictions. Alongside the Bribery Act, the introduction of DPAs (the UK equivalent of widely-used Non-Prosecution Agreements in the US), as an alternative to a full-blown criminal prosecution, was designed to overcome some of the legal, practical and resourcing obstacles faced by prosecutors when seeking to hold companies to account, while encouraging transparency and engagement on the part of the accused. Companies which self-report suspicious activity and co-operate fully and openly with prosecutors may be rewarded with a DPA and a reduced penalty, rather than a high-profile and costly court action, which carries the threat of a corporate conviction.

The UK’s response to the enforcement of its anti-bribery and corruption measures is part of a co-ordinated global initiative. Increased use of DPA-style settlements, greater international co-operation and a wider scope of corporate liability have all been consistent themes in global anti-corruption efforts in recent years.

 

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Overview of relevant law and regulation

The UK Bribery Act was an innovative piece of legislation for two reasons.

Firstly, it introduced an “adequate procedures” defence, which allows a corporate to avoid prosecution for bribes offered or given on its behalf if it can demonstrate that it had procedures in place which should have been adequate to detect and prevent such behaviour. Secondly, the strict liability “failure to prevent bribery” approach addressed the vexed issue of corporate criminal liability, paving the way for criminal prosecutions of companies with no requirement to prove the involvement of a single “directing mind” at board/executive level.

The novel approach is the subject of extensive guidance on what constitutes “adequate procedures”, and has been the template for other corporate liability regimes, such as the more recent Failure to Prevent tax avoidance legislation (see Ethical taxation). For links to relevant legislation and guidance, please see below.

Best practice

A proactive approach to anti-bribery and corruption management will help protect a company’s reputation and assist in demonstrating to business partners and enforcement agencies that “adequate procedures” are in place to prevent acts of bribery occurring.

Areas of particular focus are likely to include:

  • risk assessment and ongoing review, especially in relation to perceived “higher-risk” sectors and territories
  • development and active enforcement of an anti-bribery and corruption policy and related procedures, addressing all relevant bribery and corruption risks
  • implementation of a clear anti-bribery and corruption training and communications strategy, involving external stakeholders as well as staff, which articulates the business’s zero-tolerance approach in this area and can assist in evidencing senior-level engagement
  • standardised contractual anti-bribery and corruption provisions in engagements with customers, suppliers, intermediaries and other third parties
  • governance procedures to ensure compliance with those contractual obligations

Recent work

Our recent work includes

Contacts and further reading

Read Doug Bryden's Profile
Read Michael Cuthbertson's Profile
Read Rob Fell's Profile
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