The United Kingdom Bribery Act 2010

• Author: Robert W. Tarun
• Pages: 427-464

CHAPTER 11

The United Kingdom

Bribery Act 2010

I. BRIBERY ACT 2010

A. Four Bribery Offenses

The United Kingdom Bribery Act 2010 (c. 23) (the Bribery Act or the Act) is an Act of

the Parliament of the United Kingdom that covers its criminal law relating to brib-

ery.1 Following both Labour and Conservative Party support, the 19-section Bribery

Bill received the Royal Assent on April 8, 2010, becoming the Bribery Act 2010. Ini-

tially scheduled to become effective in April 2010, its effective date was extended to

July 1, 2011. The Act repeals all previous statutory and common law provisions in

relation to bribery, replacing them instead with four bribery offenses: (1) offering a

bribe; (2) receiving a bribe;2 (3) bribery of a foreign public official; and (4) the failure

of a commercial organization (corporation or partnership) to prevent bribery on its

behalf. The Act addresses only bribery, which is generally defined as giving someone

a financial or other advantage to perform their functions or activities improperly or

to reward that person for already having done so. “Financial or other advantage” is

not defined in the Bribery Act and is left to the fact finder. All four offenses can be

committed by individuals and corporations. The Serious Fraud Office (SFO) is the

leading U.K. agency for investigating and prosecuting cases of overseas corruption.

The penalties for committing a crime under the Act are a maximum of 10 years’

imprisonment for an individual along with an unlimited fine for corporations,3 and

the potential for the confiscation of property (disgorgement) under the Proceeds

of Crime Act of 2002 (POCA), as well as the disqualification of directors under the

Company Directors Disqualification Act of 1986.

B. U.K. Foreign Bribery Actions

Foreign bribery actions are a relatively recent development in the United Kingdom.

The first—Balfour Beatty plc—was brought in 2008 and resulted in a £2.25 mil-

lion penalty. Balfour Beatty was part of a joint venture to build the Bibliotheca

Alexandrina, a library in Alexandria, Egypt. The company investigated irregulari-

ties and reported the matter to the SFO in April 2005. The SFO then investigated

and ultimately agreed to a civil consent order, the first Civil Recovery Order made

under POCA. The civil consent order allowed Balfour Beatty, a major engineer-

ing and construction services company, to avoid being debarred for public works

contracts. Since this action the SFO has obtained eight other corporate resolutions

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relating to improper foreign payments with U.K. fines ranging from £5 million to

£30 million.

• Mabey & Johnson Ltd. (2009)—£6.5m

• AMEC plc (2009)—£5m (Civil)

• Innospec Inc. (U.S.) & Innospec Ltd. (U.K.) (2010)—U.S. $17m and £9m

(U.S./U.K.)

• BAE Systems plc (2010)—U.S. $400m and £30m (U.S./U.K.)

• M.W. Kellogg Ltd. (2011)—$400m and £7m (U.S./U.K.) (Civil)

• Johnson & Johnson and DePuy Ltd. (2011)—U.S. $70m and £5m (U.S./U.K.)

(Civil)

• Weir Group (2011)—£17m4

• Macmillan Publishers Ltd. (2011)—£11.2m (Civil)

Thus, five of the nine resolutions impose civil rather than criminal sanctions, rec-

ognizing the disclosure and cooperation of the companies. (See VII.B.3 Voluntary

Disclosure discussion.) In the United Kingdom, individual foreign bribery prosecu-

tions, as in the United States, have been significantly fewer.

In developing comprehensive foreign public official bribery legislation and poli-

cies, the United Kingdom has clearly borrowed from the 1997 OECD Anti-Bribery

Convention on Combating Bribery of Foreign Public Officials in International Busi-

ness Transactions (OECD Convention) as well as U.S. DOJ and SEC FCPA enforce-

ment policies. The SFO’s staff has developed close working relationships with its U.S.

counterparts and can be expected to adopt future policies and priorities in signifi-

cant part similar to those of the DOJ and SEC. U.S. efforts in this enforcement area

were gradual and at times halting in the first 20 years, and the U.K. effort remains

in its infancy stage. Still, the SFO and its new legislation are viewed as a clear anti-

corruption catalyst for other nations in Europe and elsewhere, marking the end of an

era where one superpower attempted to enforce global anti-corruption largely alone.

C. Guidance

On March 30, 2011, the SFO and the Director of Public Prosecutions issued Joint

Prosecution Guidance (Guidance), infra, about procedures that companies can put

into place to prevent persons associated with them from bribing.5 In addressing

the four offenses and the adequate procedure defense, the Guidance addresses

inter alia jurisdiction over foreign companies, “associated persons” including joint

ventures, corporate hospitality, facilitation payments, and mandatory debarment,

and further offers 11 case studies.

In this chapter we now focus on: (1) the offense of bribery of a foreign official (Sec-

tion 6), which is most analogous to the FCPA; (2) the unprecedented strict liability

failure of a company to prevent bribery on its behalf (Section 7); (3) the Adequate Pro-

cedures defense as clarified in the March 2011 Guidance; (4) a summary of the Guid-

ance’s 11 case studies; (5) lists of the principal similarities and differences between the

Bribery Act and the FCPA; (6) discussion of the SFO’s voluntary disclosure and coop-

eration program; and (7) practical guidance for multinational companies seeking to

comply with the Bribery Act and combat bribery in international business transactions.

The United Kingdom Bribery Act 2010 429

II. BRIBERY OF FOREIGN PUBLIC OFFICIALS

Section 6 of the Bribery Act makes bribery of a foreign public official a stand-alone

distinct crime, consistent with the requirements of 1997 OECD Anti-Bribery Con-

vention on Combating Bribery of Foreign Public Officials,6 and applies to both

individuals and corporations. There are at least five key elements to understand in

connection with this new offense: (1) the combined mental state; (2) conduct; (3)

foreign public official; (4) jurisdiction; and (5) “consent and connivance.”

A. Mental State

Sections (1) and (2) address the requisite combined mental state.

(1) A person (“P”) who bribes a foreign public official (“F”) is guilty of an offence if P’s

intention is to influence F in F’s capacity as a foreign pubic official.

(2) P must also intend to obtain or retain—

(a) business, or

(b) an advantage in the conduct of business.

There are two separate and distinct elements to the mental state: (1) P must intend

to influence the foreign public official in his capacity as a public official, and (2) P

must intend to bribe in order to obtain or retain business or an advantage in the con-

duct of the business.7 The Guidance states that the policy underlying this offense is

“the need to prohibit the influencing of decision-making in the context of public busi-

ness opportunities by the inducement of personal enrichment of foreign public offi-

cials, or to others at the official’s request, assent or acquiescence.”8 Like the U.S. FCPA,

the Bribery Act not only covers improper conduct that directly results in “obtaining

and retaining business,” e.g., bribes to secure large government contracts, but also

improper conduct that obtains or retains “an advantage in the conduct of the busi-

ness,” such as bribes to fix local tax or customs issues or to obtain permits or licenses.

B. Conduct

Section 6(3) addresses the requisite conduct of the offense—that is, what a person

must do in order to commit the offense. It provides:

P bribes F if, and only if—

(a) directly or through a third party, P offers, promises, or gives any financial or other

advantage—

(i) to F, or

(ii) to another person at F’s request or with F’s assent or acquiescence, and

(b) F is neither permitted nor required by the written law applicable to F to be

influenced in F’s capacity as a foreign public official by the offer, promise, or gift.

A person will be guilty of this new offense if he promises, offers, or gives a financial

or other advantage to a foreign public official, either directly or through a third

party, where such an advantage is not legitimately due.

The inclusion of “through a third party” in subsection (3) is intended to address

and prohibit the use of intermediaries in bribing a government official. There is a

narrow exception where the written law of the country of the foreign public official