Anti-bribery and corruption laws

After stalling for more than 10 years over the need to make major reforms to the UK's criminal anti-bribery and corruption laws, the Government seems to be taking steps to move towards a simplified body of new laws that could leave companies that turn a blind eye to bribery overseas facing threat of prosecution.

It is hoped that these new laws will bring the UK in line with international developments in anti corruption law. The US in particular has taken a leading role in combating bribery and corruption at home and abroad. Congress enacted the Foreign Corrupt Practices Act in 1977 to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the US business system. It then commenced negotiations with the OECD in 1988 to obtain agreement with the US's major trading partners to enact legislation similar to FCPA 1977. The US has since ratified the Convention in 1998 and at the same time making significant changes to FCPA 1977, including an extension of its jurisdiction to foreign individuals or companies acting in furtherance of corruption whilst in the US.

Perhaps in response to recent OECD criticism of the UK which stated, that it was "disappointed and seriously concerned" about the UK's continued failure to address deficiencies in its law. The Law Commission published, on the 20 November 2008, a detailed review (Report 313 Law Commission) of the existing law, and proposed a draft bill intended "to make the law of bribery simpler and more appropriate to modern times and consistent with our international obligations."

The proposed draft Bribery Bill will:

Make it a criminal offence to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad. The measures cover bribery of a foreign public official.

Increase the maximum penalty for bribery from seven to 10 years' imprisonment, with an unlimited fine.

Introduce a corporate offence of negligent failure to prevent bribery by persons working on behalf of a business. A business can avoid conviction if it can show that it generally has good systems in place to prevent bribery.

Ensure evidence from proceedings in Parliament can be considered by the Courts in bribery cases by removing Parliamentary Privilege in the prosecution of an MP or Peer.

The draft Bill distinguishes between bribery and legitimate business exchanges by setting out the circumstances in which a criminal offence has been committed. The draft Bribery Bill will replace offences in common law and the Prevention of Corruption Acts 1889-1916.

It is also recommended that the new law covers foreign nationals who reside in the UK or who conduct their business in the UK.

The corporate offence of failure to prevent bribery is perhaps the most significant proposed change and brings the threat of a tougher punishment than previously seen. Individuals found guilty of an offence would face a maximum of ten years imprisonment or a fine, or both. The maximum penalty for a company would be an unlimited fine. It would, however, be a defence to show that adequate procedures had been implemented intended to prevent bribery by the person paying the bribe.

Though corruption campaigners and the OECD are likely to welcome the proposal to tighten the law, we will need to wait to see how effective the steps taken will be to bring the UK up to speed with other developed nations. There are already warnings against giving companies to wide a scope to defend themselves by arguing they had anti-corruption safeguards in place and further criticism of the government for proposing the law be passed in the next parliamentary session rather than during this one. However, what is certain is the need for potentially affected companies to make use of the lead time to install adequate procedures to make sure they do not fall short of the requirements of any new law.