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Introduction To The UK Bribery Act « Back
Matt Atkins, June 2011
 
Described as ‘the toughest anti-corruption legislation in the world’, the UK Bribery Act is due to enter onto force on 1 July 2011. It is without doubt one of the most significant pieces of criminal legislation to affect the corporate world since the Proceeds of Crime Act 2002. A result of much legal wrangling, debate and dispute, the Act is sure to alter the business landscape of the UK, forcing companies to re-evaluate how they conduct their own business and partner with others. And while not everyone is convinced by the new legislation, all businesses must act to avoid the risk of enforcement action.

Offences

The Act has had something of a difficult birth, a first draft being announced and rejected as far back as 2002. A consultation paper published in 2005 examined the perceived concerns, and while it was agreed that there was broad support for reform, the government could not see how this could be realistically achieved. A white paper followed in March 2009, preceding the Bribery Bill announced in the Queen’s speech of that year.


The bill received support from all parties, despite pressure from the Confederation of British Industry, which was apprehensive about its impact on British competitiveness. Despite the concerns, the Bill received Royal Assent in April 2010 and became the Bribery Act 2010.

When implemented in July, the Act will replace the UK’s old anti-bribery law – an amalgamation of ‘inconsistent, anachronistic and inadequate’ legislation dating back to 1886. “The consisting anti-corruption legislation is very old, comprising of three pieces of legislation dealing with public and private bribery separately, and overseas bribery of foreign public officals in a third statute” explains Elizabeth Robertson, a partner at Addleshaw Goddard. “The attempt under the Anti-terrorism Crime and Security Act to make the UK’s corruption legislation apply overseas never truly satisfied critism of the inadequacy of UK legislation as expounded by the OECD in particular, but also by other organisations, including Transparency International and other anti-bribery campaigners.” The new, comprehensive anti-bribery statute attempts to tackle the criticism of the earlier legislation, providing a clearer legislative framework and enabling UK authorities to more effectively tackle global corruption. It aims to make it easier to indict commercial organisations, along with any individuals associated with them, who commit bribery on their behalf.

Primarily, the Act sets out to achieve this objective by implementing four main offences. First, the Act covers the two ‘general offences’ of paying and receiving bribes. Section 1 of the Act makes it an offence to offer, promise, or give a financial or other advantage with the intention of persuading an individual to perform a ‘relevant function or activity’ ‘improperly’ or to reward that individual for doing so. The Act also makes it an offence to receive financial and other advantages with a view to performing a ‘relevant function or activity’ ‘improperly’, as outlined in Section 2. In the language of the Act, the term ‘relevant function or activity’ covers any public or business function. The individual performing that activity must do so in good faith, impartially, or be in a position of trust. If the performance of this ‘function or activity’ breaches the expectation of what a reasonable person in the UK would expect, it will be judged as ‘improper’ performance.

The ‘function or activity’ in question need have no connection to the UK. Where a breach of the Act occurs outside the UK, local practices or customs should be disregarded unless they form part of the ‘written law’ of the jurisdiction – ‘written law’ meaning any constitution, statute or judicial opinion set down in writing. Understandably, these broad and complex definitions have fuelled speculation and concern that they will infringe on particular facets of normal business conduct. As such, there is a strong possibility that the UK will see an initial flurry of litigation when the Act is implemented. Although members of the business community may consider the vagueness of the Act as intentional, the government has been at pains to make it clear the objective of the Act is not to ‘trip up’ legitimate business activities. “The ultimate aim of this legislation is to make life difficult for the minority of organisations responsible for corruption, not to burden the vast majority of decent and law-abiding businesses,” the Lord Chancellor, and Secretary of State for Justice, Kenneth Clarke, has explained.

The next offence covered by the Act is the bribery of foreign public officials, which is made a distinct crime under Section 6. An individual will be guilty of this offence if he or she offers or gives a financial or other advantage to a foreign public official, either directly or through a third party, with the aim of influencing the official and obtaining or retaining business. The Act defines a foreign public official as “an individual holding legislative, administrative or judicial posts or anyone carrying out a public function for a foreign country or the country’s public agencies or an official or agent of a public international organisation”. The inclusion of the ‘third party’ is intended to prevent individuals using go betweens otherwise known as “agents” or “intermediaries” to avoid committing a crime themselves. While the legislation falls into line with the OECD Anti-Bribery Convention, the section is distinguished by the absence of a requirement to show that the public official acted improperly as a result of bribery. The offence under the Act applies only to the briber, and not the official who receives or agrees to the bribe.

These new offences have raised a great deal of concern, and some confusion as to what actually constitutes an act of bribery. The wording of the Act is particularly broad, and businesses are not sure where the lines have been drawn. Of specific concern is the point at which everyday hospitality and courting of clients becomes an offence.
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