U.K.'s sweeping anti-corruption legislation increases risk for businesses.

• Author: Hengsbach, Bethany
• Position: LEGAL ISSUES

The United States Foreign Corrupt Practices Act (FCPA) has received a great deal of attention of late. The U.S. government's increased FCPA enforcement efforts resulted in $1.2 billion in fines and sanctions in the first few months of this year, as well as a seven-year prison sentence for an executive of a U.S. corporation.

But across the pond, the United Kingdom is making its own headlines with the UK Bribery Act 2010, which received Royal Assent on April 8 and is expected to take effect towards the end of the year.

This new law has far-reaching implications for any business that is either incorporated in the U.K. or has any part of its operations there. Such companies need to be aware of the act's provisions and update their compliance efforts accordingly.

The act is generally broader and stricter than the U.S.'s FCPA. It applies to behavior taking place either inside the U.K. or outside it, provided that the person or entity has a "close connection" with the U.K.

A person or entity has a sufficiently close connection with the U.K. if that person at the time of the offense was, among other things, a British citizen; an individual ordinarily resident in the U.K.; or a body incorporated under the law of any part of the U.K. The "failure to prevent bribery" provision (see below) applies to any partnership or corporation with any business operations in the U.K.

The act differs from FCPA in several significant ways:

1. The act applies to purely private commercial transactions as well as...