Caught in the Act
The U.K.’s new Bribery Act can
ensnare you on things as simple as entertainment expenses.
The United Kingdom’s new Bribery Act goes into effect
July 1, replacing a variety of complex anti-bribery laws. With
it comes a lot of uncertainty about what is and isn’t
considered bribery and who will be covered by the new law.
Brokers around the globe might be exposed to liability under
the act for actions taken by their employees, agents or
subsidiaries in or outside of the U.K.
The Bribery Act has a long reach and applies to the conduct
of anyone remotely associated with a U.K. business. It also
creates a corporate standard of strict liability for failing to
prevent bribery. The act makes bribery of a public official or
private individual a crime—in contrast to the U.S.
Foreign Corrupt Practices Act, or FCPA, which is directed only
at public officials.
The new law raises many questions about corporate client
entertainment. For example, if you treat a prospective client
to a lavish dinner hoping to land an account—is that
considered marketing? Or bribery?
Another area of controversy is the so-called facilitation
payment. These are generally low-level payments to local
officials to get a project going, such as funding for a new
road leading to the project. The FCPA provides an exemption for
these payments; the Bribery Act does not.
The U.K.’s zero-tolerance policy on bribery
establishes tough penalties, including up to 10 years in
prison. Companies would also face stiff fines and could be
banned from bidding on future public contracts.
The Ministry of Justice released long-awaited guidelines to
assist businesses in complying with the new law, but there are
a number of unanswered questions. Brokers can find Justice
Ministry help at www.justice.gov.uk.
Here is some general guidance from the Ministry, the London
International Insurance Brokers Association (LIIBA) and other
sources. It is by no means comprehensive. Be sure to seek legal
counsel when applying the law to you and your organization.
There are four offenses:
1. Offering, promising or giving a bribe to another
2. Requesting, agreeing to receive, or accepting a bribe
from another person
3. Bribing a foreign public official
4. Failing to prevent bribery by an association person, in
the case of a commercial organization or partnership (the
so-called “corporate offense”).
Who falls under the Bribery Act? All U.K. businesses are
subject to the law. It applies to non-U.K. companies if they or
their employees or agents are involved in an act of bribery
that involves a U.K. connection. Any firm that does business in
the U.K. is also exposed if it violates the law anywhere in the
world (with or without its knowledge).