The Bribery Act 2010 is intended to be brought into force in the UK in April 2011 and will create consistency between UK law and the OECD Bribery Convention, which the UK ratified in 1998. It has recently been signalled by the Ministry of Justice that the implementation of the Act may be now delayed due to intense business lobbying.
There are four main offences under the Act: the general offences of paying and receiving bribes, the bribery of foreign officials and the failure of commercial organisations to prevent bribery.
The corporate offence represents the most significant aspect of the Act. It applies where a “person associated with the organisation (defined broadly as persons providing services and specifically includes employees, agents or subsidiaries) bribes another to gain business or a business advantage for the organisation. It is a strict liability offence and the only defence available is to show that the organisation had adequate procedures in place to prevent bribery. The Act therefore encourages businesses to have an anti-corruption policy in place. Finalised guidance on what constitutes “adequate procedures” was initially intended to be published by the Ministry of Justice in early 2011 but may now be delayed. The Ministry of Justice has stated that the Act will not come into force until three months after any guidance is published.
The Act has extra-territorial application and offences under the Act may be prosecuted regardless of where the act or omission which constituted the offence took place. The corporate criminal offence will apply to companies/partnerships incorporated outside the UK but with that carry on a business or part of a business in the UK. Therefore any corporations with a presence in the UK will need to familiarise themselves with the new legislation. How broadly “part of a business” will be interpreted is a matter for the courts.
The Act will increase the maximum jail term for bribery by an individual from 7 years to 10 years. A company convicted of failing to prevent bribery could receive an unlimited fine.
In Ireland, the Prevention of Corruption (Amendment) Act 2001 currently applies to corruption offences (committed by bodies corporate as well as individuals) where some element of the offence has been committed in Ireland or where the offence has been committed outside Ireland but by a public official. The 2008 Prevention of Corruption (Amendment) Bill, which passed Committee Stage on 16 June 2010, will increase the extraterritorial jurisdiction of the 2001 Act by extending the categories of persons in encompasses to include Irish citizens, persons ordinarily resident in Ireland or an Irish registered or other body corporate established under the laws of Ireland. The 2008 Bill also contains protection for “whistleblowers”, including employees who report offences under the legislation. It does not capture organisations with a mere business presence in Ireland and is therefore not as far reaching as its UK equivalent.
Several major pharmaceutical and medical device companies are being investigated by U.S. federal prosecutors in connection with an inquiry into whether such companies have made payments to doctors and health officials abroad which would be caught under U.S. corruption legislation – the Foreign Corrupt Practices Act. There is particular focus on payments made to doctors that are involved in clinical trials conducted abroad, many of which fall within the definition of a foreign official due to the fact that they are employed by the state in question. Such payments would also be caught by the Irish and UK legislation, when it comes into force. It is essential that companies engaging in such activity familiarise themselves with this legislation and ensure that internal compliance procedures are in place.
