UK Bribery Act 2010 Nick van Benschoten UK Government (OECD Guidelines for Multinationals & OECD Working Group on Bribery)

Overview Bribery Act Section 6 - Bribery of foreign public officials Section 7 - Failure to prevent bribery Section 9 - Adequate procedures Other guidance Diplomatic assistance International co-operation References

Bribery Act 2010 Consolidates and modernises 1889-1916 Prevention of Corruption Acts, replacing agent/principal model and reliance on the term ‘corruptly’ New offence of bribery of foreign public official New corporate offence of failure to prevent bribery New board-level liability for connivance or consent to active corporate corruption New senior executive liability for connivance in active corporate bribery (not failing to prevent) Prosecution have to prove not permitted or required by local law Offset, community investment, visa fast-track fees - see 2010 OECD report on Bribery Act

Section 1 – Active bribery Offer of advantage with intention to induce ‘improper performance’ – defined as breach of an expectation of good faith, impartiality, or acting in position of trust Jurisdiction over any act by UK nationals, UK legal persons and ordinary residents in the UK Expectation that of a reasonable UK person, unless different overseas custom & practice mandated in local law Covers public and private sector corruption Test of general adequacy despite proven case of bribery on company’s behalf See 2009 OECD Anti-Bribery Recommendation -distinguishes gvt agreement to encourage ‘adequate’ anti- bribery systems from voluntary guidance on ‘effective’ systems. No record-keeping requirements but unhelpful to defence if less documentary evidence compared to other internal controls (e.g. IPR, embezzlement)

Section 6 – Bribery of foreign public officials Based on Article 1 of the OECD Anti-Bribery Convention Addresses similar misconduct as Section 1 but based on ‘improper advantage’ model Offer of advantage to official or their nominee, with intention to influence official to provide a business advantage in return Burden on prosecution to prove ‘improper advantage’ (i.e. official neither permitted nor required to be so influenced by local law) Test of general adequacy despite proven case of bribery on company’s behalf See 2009 OECD Anti-Bribery Recommendation -distinguishes gvt agreement to encourage ‘adequate’ anti- bribery systems from voluntary guidance on ‘effective’ systems. No record-keeping requirements but unhelpful to defence if less documentary evidence compared to other internal controls (e.g. IPR, embezzlement)

Section 7 – Failure to prevent bribery Liability for bribery by associated persons intended to win business advantage for company No requirement for prosecution or conviction, but prosecution must prove that such bribery occurred Associated person defined in terms of those providing services to or on behalf of the company Presumably employees but may also be agents or subsidiaries; based on all the relevant facts, not just formal relationship Complete defence if company can show that they had adequate procedures Test of general adequacy despite proven case of bribery on company’s behalf See 2009 OECD Anti-Bribery Recommendation -distinguishes gvt agreement to encourage ‘adequate’ anti- bribery systems from voluntary guidance on ‘effective’ systems. No record-keeping requirements but unhelpful to defence if less documentary evidence compared to other internal controls (e.g. IPR, embezzlement)

Section 9 - Adequate procedures Defence to new corporate offence only Generally adequate despite proven failure Company only needs to show on balance of probabilities Not regulatory, no mandatory reporting or inspection While UK companies still need to avoid fraud and keep reasonable accurate accounts, there is no offence of ‘inadequate procedures’ Test of general adequacy despite proven case of bribery on company’s behalf See 2009 OECD Anti-Bribery Recommendation -distinguishes gvt agreement to encourage ‘adequate’ anti- bribery systems from voluntary guidance on ‘effective’ systems. No record-keeping requirements but unhelpful to defence if less documentary evidence compared to other internal controls (e.g. IPR, embezzlement)

Other guidance UKTI’s Overseas Security Information for Business (OSIB) – country overview Business Anti-Corruption Portal - tools and country reports 2009 OECD good practice guide on anti-bribery systems RESIST training tool OSIB UK-business-only website providing country-specific security advice bribery and corruption advice prepared by overseas Commercial Officers Corruption a major part of OSIB seminar on India last year, plans for China Portal Country Profiles with information about corruption in over 60 countries Basic integrity tools aimed at SMEs e.g. risk assessment procedure, agent screening & consultant evaluation OECD Good Practice Guide endorsed by all 38 signatories to OECD Bribery Convention 2 page summary of internal controls & ethical programmes e.g. export programme to partners where in effective control, otherwise communicate stance and seek reciprocal commitment RESIST Guidance on resisting bribe solicitation and extortion Real-world scenarios of tenders, sales, logistics & operations Practical advice on anticipating, controlling & mitigating risks

Diplomatic Assistance Annual instructions to UK Overseas Posts from the Foreign Secretary Face-to-face preparatory briefing for outgoing Commercial Officers Officials cannot provide legal advice, but can assist companies seeking to adhere to the law Take up justified complaints of discriminatory treatment, bribe solicitation or extortion with local authorities Help companies identify international best practice in preventing bribery Sensible advice on how companies might avoid pitfalls of local culture and business etiquette Help address concerns through local knowledge and contacts

International Co-operation Support good governance overseas Ongoing monitoring and development of international instruments G20 Seoul commitments Good governance Public finance management; Audit and parliamentary oversight; Specific anti-corruption institutions, etc. International instruments Newly agreed UNCAC monitoring for 140+ countries; Third round of monitoring for 38-strong OECD Working Group on Bribery; African Union Convention, etc. G20 Anti-Corruption Action Plan adopted by all leaders in Dec 2010 e.g. non-G20 countries to criminalise bribery & work with OECD e.g. visa denial against corrupt officials

References Nick.vanbenschoten@bis.gsi.gov.uk 020 7215 6206 www.bis.gov.uk/anticorruption www.uktradeinvest.gov.uk/ukti/osib www.business-anti-corruption.com www.oecd.org/corruption/initiative OECD report on Bribery Act www.oecd.org/dataoecd/58/43/46883138.pdf