Specialist analysts and trade bodies have released a new wave of insights into the UK Bribery Act 2010 and the adequate procedures to prevent bribery that could be a commercial organisation’s only defence against legal prosecution. Overall the guidance published cannot widely differ from tackling the offences and defences contained in the law.
The act itself, finally passed in 2011, criminalises both paying and receiving bribes. It’s extra-territorial reach means, much like the US Foreign Corrupt Practices Act 1977, firms who are based outside the UK, could breach the act and be prosecuted in the UK. Unlike the FCPA, the act contains no special permission for ‘facilitation payments’.
When determining liability under the act, a question mark hangs over whether the intended recipient of the bribe is “reasonably expected” to perform a function or activity in good faith and impartially. This function could be traffic duty, awarding contracts or issuing licences. Under the provisions of the UKBA, what is expected of that police officer, councillor or civil servant is what a reasonable person in the UK would presume. Local custom and practice should be disregarded unless permitted by written law.
If for example, under the UK law someone in Aberdeen could be expected to have the same opinion of a given situation as someone from Bristol, could the law assume someone in Cardiff to act in the same way in a given situation as someone in Kathmandu? This becomes more acute when addressing the knotty, pervasive and subjective issue of offering or being asked to pay a bribe.
One man’s reason is another man’s madness
Certain types of expected, or not unusual behaviour, in one jurisdiction may be highly suspect in another. This handful of examples from Asia and Africa highlight certain differences.
India – Traffic police in New Delhi stopped a friend’s car on Christmas Eve and asked to see his driving licence. My friend knew the cops were looking for money and realised he had 200 rupees in change him. He managed to persuade the cops to accept 100 rupees, and kept the second note in case of more bribes required at traffic stops before reaching his destination.
Kenya – As tweeted by Transparency International, a Kenyan had to pay a $24 bribe to a traffic cop for speeding — but then successfully argued that $8 of it should be returned so he could have something left to pay bribes farther down the road.
Thailand – Police on some of the islands work to their own rules. There is a fixed fee for motorcycle violations, such as 2000THB for not wearing a helmet, paid to the officer up front. Police road blocks increase in frequency around public holidays. Police officers visit local bars when they are busy and expect to receive cash or alcohol to keep the bar open. Annual collections are made from businesses, who are expected to buy tickets for a function they will never attend, or advertising space in a police publication. Local business owners know this is coming and always pay up.
UK – The friend from India asked me if you would ever pay traffic police to allow you to continue your journey. Or, if fined by the traffic police, would you ever be expected to hand cash over to them directly?
Asia (and possibly the world over) – Construction projects are known bribery black holes and anyone working in this field, whether it is building hotels, hospitals or sports stadia, accepts this as the status quo. Someone in the hotel business once told me ‘there are many hands to feed’ which manages both to accept bribery as a given and view it as an act of great benevolence.
Know your associated parties
Liability under the UKBA can stem from the actions of a person associated with the firm, who performs services for or on behalf of the company in order to obtain or retain a business advantage for the company. Whether or not the person performs a service with the firm is based upon an ‘all-things-considered’ inquiry, which could take into account the entity’s historical relationship with the firm. Importantly, passive bribery, the act of requesting, agreeing to receive or accepting a bribe is also illegal.
Knowing your associated parties and managing their actions is fundamental element of the UKBA. The British Bankers Association produced a non-exhaustive list of some of the titles linked to associated persons. Associated persons could be consultants, finders, introducers, intermediaries, lobbyists, lawyers, sales and marketing firms, contractors, members of joint ventures and suppliers where services are performed in addition to the selling of goods.
Perkins Cole US law firm has published this interesting and useful flow chart to assess the risks firms face from prosecution under the UK Bribery Act 2010. The decisions made lead to the possible eventualities of liability or no liability, assessing clauses of the law along the way. It is a useful and easy to follow guide for firms who think they are exposed to bribery either via the nature of their own business or via associated parties.
The firm has also published an infographic comparing anti-bribery and corruption laws in the China, Germany, India, UK and USA.
As published on Compliance Knowledge Platform