In late March 2009, the United Kingdom’s Secretary of Justice Jack Straw proposed a new bill to fight bribery that shows a resemblance to the existing Foreign Corrupt Practices Act (FCPA) of the United States. The bill was drafted because of domestic and international pressure to replace the U.K.’s outdated statutory and common law rules. Justice Secretary Straw said that the new legislation can “provide our courts and prosecutors with the tools they need to tackle bribery effectively, wherever it occurs” (either in the U.K. or abroad). This bill is not yet law, and thus not currently in force. But the possible implications for companies and their conduct within and outside the U.K. are significant.
U.S. Foreign Corrupt Practices Act: Key Provisions
Pressure for U.K. legislation reform has been growing at an international level since the U.S. introduced the FCPA in 1977. The FCPA was one of the first pieces of legislation enacted to fight bribery internationally. The U.S. act prohibits corrupt payments to foreign officials for the purpose of obtaining or retaining business by U.S. firms which is also a central element in the proposed U.K. anti-bribery bill. Key provisions of the FCPA can be found here.
Proposed U.K. Anti-Bribery Bill: Key Provisions
The U.K. bill proposes to repeal the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906, and the Prevention of Corruption Act 1916 (known collectively as the Prevention of Corruption Acts 1889 to 1916), as well as related common law, and replace them with one comprehensive law containing several new and modified provisions. Some of the most important elements of the new law include:
- Makes it a criminal offense to give or receive a bribe in the U.K., regardless of whether it is given to or received from a private or public official.
- Prohibits bribery of foreign public officials.
- Allows for extraterritorial jurisdiction over the activities of U.K. nationals, U.K. corporate bodies, and persons ordinarily resident to the U.K.
- Increases the maximum penalty for bribery from seven years to 10 years imprisonment with an unlimited fine.
- Allows for an “adequate procedures” defense when negligent failure to prevent bribery occurs.
- Removes Parliamentary Privilege (legal immunity against criminal and civil liability related to public function) when prosecuting a Member of Parliament (MP) or a Peer from Parliament (PP).
Key Differences between U.S. Law and Proposed U.K. Anti-Bribery Bill
The proposed regulations align the U.K.’s anti-bribery laws with international anti-bribery standards – notably the FCPA. Nonetheless, while several of the provisions of the U.K.s anti-bribery bill are similar to the FCPA, there are some vital differences.
One is that the proposed U.K. anti-bribery legislation applies to bribery of both private and public officials within the U.K., where the FCPA only applies to bribery of foreign officials. The proposed U.K. law also penalizes the receipt of a bribe where the FCPA does not. Additionally, the proposed U.K. law creates an “adequate procedures” defense for corporate liability when employees negligently fail to prevent bribery. The FCPA does not have such a defense. Although these differences exist, the U.K. anti-bribery reforms will help the United Kingdom collaborate more effectively with the United States and its other international partners.
Should the proposed legislation be adopted, multinational companies will face a new big player in the anti-bribery law enforcement arena in addition to the United States. Because the standards vary in certain respects from those imposed by the FCPA, companies will need to ensure that their compliance programs are equipped to handle both sets of laws. McGuireWoods regularly works with its clients in building and modifying compliance programs, and can provide appropriate guidance concerning international anti-bribery compliance as foreign and international laws and enforcement efforts continue to increase and change.
Justice Secretary Straw’s proposed anti-bribery bill could come into effect in as early as six months from now, if it receives a Royal Assent from Parliament. With MPs welcoming the new bill, we encourage companies to remain proactive in keeping up with the status of the proposed legislation, and begin reviewing their compliance programs to ensure they will be operating in harmony with the new law. The U.K. has become an increasingly larger player in the anti-bribery and anti-corruption arena, and it is only a matter of time before it begins to enforce its own laws. Given the unprecedented detail, attention and support given to this new bill, that time may be near.