International Archives

Some call the new U.K. Bribery Act “The FCPA on Steroids”

The new law, called the Bribery Act, takes effect in April 2011. It resembles the U.S. Foreign Corrupt Practices Act (FCPA) which bars companies that trade on U.S. exchanges from bribing foreign government officials to gain a business advantage, but the Bribery Act goes beyond the FCPA by not just prohibiting illicit payments to foreign officials, but also bribes between private business people. It holds even if the individual who makes the payment does not realize that the transaction was a bribe.

And the Act’s impact extends beyond U.K.-based companies. It applies to entities with any “business presence” in the U.K., regardless of where the act of briberyoccurs. It also covers bribery by any person with “close connections” to the U.K., including both British citizens and citizens of others countries “ordinarily residing” in the U.K.

According to the Ministry of Justice, the law basically creates three criminal offenses: 1) giving or accepting a bribe designed to induce someone to perform a function improperly; 2) bribing a foreign public official with the intention of obtaining a business advantage, and 3) failing to prevent bribery.

Legal experts say that the most significant development in the law is a company’s strict liability for failing to prevent bribery (by an employee, a joint-venture partner or a subsidiary.) Under the Act, the company can be penalized with an unlimited fine for such actions, and further can be held liable for the acts of bribery by a person “associated” with the company who is trying to obtain a business advantage for the company. And unlike the FCPA, the Act does not exempt from prosecution what are commonly known as “facilitation payments.” (In some parts of the world, it is common practice to pay a small amount of money to ensure that an otherwise legitimate permit is approved in a timely manner.)

While the British government released some draft guidance on the Act in late 2010 and more definitive text is expected in 2011, it is unclear how vigorously the law will be enforced or what resources will be committed to investigating and prosecuting the suspected violations. Ultimately, it will be up to the courts to determine the true impact of the new law.

Decoding criminal records in the UK

In the UK, a criminal record is technically any conviction in a court of criminal offence. However, many motor vehicle offences are not deemed as crimes for criminal record purposes, since such offences carry fixed penalties and are not considered criminal convictions. Offences that are prosecuted by local authorities are sometimes classified as criminal offences, although they are unlikely to be in the Police National Computer (the “PNC”). Even if an individual has accepted a “police caution” as an alternative to prosecution, this would count as a criminal conviction.

The Criminal Records Bureau standard and enhanced disclosures contain information about convictions, cautions, reprimands, and warnings retained in the PNC and the equivalent systems in Scotland and Northern Ireland. For the purposes of CRB disclosures, a caution, reprimand, or warning that has been entered into the PNC will constitute a criminal record.

Criminal convictions also are labeled as “spent” and “unspent.” A “spent” conviction is removed from public records, meaning that the defendant has served time and passed through a rehabilitation period. Until then, the conviction is “unspent.” Some convictions, such as crimes with a prison sentence of more than 2.5 years, remain “unspent” indefinitely, regardless of the elapsed time. For convicted minors under 18 years of age, the “unspent” period is cut in half.

During the “unspent” time, the conviction must be disclosed when applying for jobs and on other applications. And for certain jobs such as law enforcement, some roles in the financial services sector, prison services, health services, private security, and for work with children, the elderly, and disabled, “spent” convictions also must be disclosed.