Introduction to the Second Edition

• Author: Robert W. Tarun
• Pages: 27-28

INTRODUCTION

TO THE SECOND EDITION

Since the publication of The Foreign Corrupt Practices Handbook over a year

ago, there have been a number of very significant anti-corruption developments and

events. First, the U.S. Department of Justice (DOJ) and the Securities and Exchange

Commission (SEC) obtained record Foreign Corrupt Practices Act (FCPA) fines in

Fiscal Year 2010. Indeed, seven of the 10 largest FCPA monetary fines ever, totaling

over $1.4 billion in fines, were returned in FY 2010 (Chapter 10).

Second, the Dodd-Frank Whistleblower Rules promulgated on May 25, 2011,

now create strong financial incentives for employees and others to report poten-

tial violations of securities laws such as the FCPA. The SEC’s new whistleblower

program became effective August 12, 2011. The SEC anticipates a large increase in

whistleblower reporting of foreign bribery by employees and by employers seeking

to reduce their potential FCPA exposure, fines, and other sanctions (Chapter 1).

Third, the long-awaited U.K. Bribery Act received Royal Assent on April 8, 2010,

confirming that anti-corruption enforcement has moved from largely the efforts of

one superpower, the United States, utilizing broad jurisdictional theories and eco-

nomic leverage on multinational companies, to a truly coordinated multijurisdic-

tional law enforcement commitment. Almost 15 years ago, the United Kingdom,

one of the earliest signatories to the 1997 Organization of Economic Cooperation

and Development (OECD) Convention on Combating Bribery of Foreign Public

Officials in International Business Transactions, was obligated to establish effec-

tive foreign bribery legislation. However, antiquated bribery laws, inactivity, inef-

ficiency, and lingering debates contributed to delay the enactment of any bill. The

OECD’s persistent criticism of the slow U.K. anti-bribery effort, and in particular

its highly critical Working Group report in 2008, likely resulted in the 2010 enact-

ment of a comprehensive bribery bill.

The U.K. Bribery Act—a statute of ambitious jurisdictional reach and even

greater potential fines (unlimited) than those available under the U.S. FCPA—

became law July 1, 2011. The British are no longer coming, they have arrived

(Chapter 11). The U.K. Bribery Act is different from the FCPA in at least two major

ways. First, Section 6 of the Act contains a strict liability offense for corporations

whose employees, agents, and subsidiaries, among others, commit foreign official

bribery. Second and counterbalancing Section 6 of the Act, Section 7 provides an

Adequate Procedures defense that can completely negate liability for companies

that put in place procedures outlined in the Ministry of Justice’s March 2011 Guid-

ance. This section gives a multinational company subject to U.K. jurisdiction the

unprecedented opportunity to avoid prosecution for a bribery offense under the

Act. Utilizing many of the same weapons as the DOJ and SEC and benefiting from

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