4 July 2012
9 April 2014
2 December 2013
17 July 2014
22 August 2013
1 November 2013
With the Bribery Act about to come into force, lawyers will be at the forefront as companies struggle to get to grips with the new regime. By Sam Eastwood
The UK Bribery Act 2010 will come into force on 1 July this year. On 30 March the UK Ministry of Justice published its long-awaited guidance under section 9 of the act regarding the “adequate procedures” required to defend successfully a prosecution for “failing to prevent bribery”.
On the same date, the director of the Serious Fraud Office (SFO) and the Director of Public Prosecutions published their joint guidance for prosecutors.
The act presents an important new challenge to business and in the run-up to the implementation of the legislation, there has been a great deal of public debate surrounding the act. On occasion, the commentary has been overstated, at times bordering on the hysterical. Secretary of State for Justice Ken Clarke has been critical of advisers, telling Parliament that lawyers and consultants “will, of course, try to persuade companies that millions of pounds must be spent on new systems that, in my opinion, no honest firm will require to comply with the act”.
Although there are some grounds for this criticism, one should not underplay the important role the legal profession can play as companies wrestle with the challenge of responding to the act, particularly when one sees it in its proper context – as just one development in a global shift in attitude towards corruption.
By way of example, the US, which has long led the way in terms of domestic and international anticorruption enforcement, has markedly increased its appetite for enforcement in recent years. Of the top 10 penalties ever imposed by the US authorities under the Foreign Corrupt Practices Act, the earliest settlement dates back to only 2008 and eight of the top 10 settlements were reached in 2010 and 2011.
This shift in attitude towards corruption is not simply a US or UK phenomenon – Spain and Italy have both introduced anticorruption laws in recent years. Nor should we consider this change as a purely Western initiative. China has recently announced an amendment to its criminal law setting out a clear prohibition on the payment of bribes to ‘foreign officials’ and ‘officials of international public organisations’. Likewise, Indonesia is in the process of changing its anticorruption laws and a draft corruption bill has also entered the Indian legislature.
Pressure to act upon corruption laws is also being exerted by the Organisation for Economic Cooperation and Development (OECD). In recent weeks both Bulgaria and Canada were reprimanded by the OECD for failing to take a sufficiently robust stance against corruption. It was, of course, criticism from the OECD that catalysed the UK Government’s decision to bring the act into force in 2010. Moreover, there has been a significant increase in levels of cooperation between national enforcement agencies in instances of international corruption.
It is this wider trend that should be of interest to lawyers. There is a real opportunity for legal advisers to take a dynamic role as anticorruption becomes an increasingly pervasive issue throughout businesses. The new environment provides a chance for lawyers to pro-actively guide their clients through the evolving global landscape at all levels of their business. This should not be looked at as merely an opportunity to advise on the mitigation of criminal liability and litigation risk, but as an opportunity to offer enlightened advice on the effective implementation and communication of policies and procedures and on strategies to deal with the practical difficulties of operating in difficult jurisdictions.
The defence guidance and joint prosecution guidance offer some useful clarifications on the act. However, on some points the guidance does not offer a consistent message, particularly in respect of the jurisdictional scope of the act. In addition, the defence guidance may have limited weight in the English courts – it does not have the force of law and can be revised by the Secretary of State at any time.
The effect of the act will depend on how it is interpreted by prosecutors and ultimately the courts, and there remains a risk that they will take a stricter line on some issues, such as ‘associated persons’ or the territorial scope of the act.
In this context, it is fair to say that the act, and the issue of anticorruption at large, is not without difficulty. For many businesses, it will be far-sighted legal advisers who will be most valued by their clients in this changing world.
Sam Eastwood is a partner at Norton Rose