Global Regulatory Enforcement Law Blog : Global Regulatory Enforcement Lawyers & Attorneys: Reed Smith Law Firm: Government Contracts & Compliance

This post was written by George Brown, Matt Stone, Simon Hart, Sarah Wolff, and Jim Sanders.

The Bribery Act 2010 (the "Act") which recently was passed by Parliament has far-reaching implications for any business which is either registered in the UK or which has any part of its operation in the UK. The breadth and importance of this legislation means that corporates and their senior officers would be well advised to familiarize themselves with the effects of this new law.

 Why is this legislation important to you and your business? The Act includes:

• A new corporate offence of failing to prevent bribery: this is a strict liability offense: a company's guilt can be a result of an attempted or actual bribery on the company's behalf;
• "Senior officers" (including non-board level managers) can individually be held criminally liable for a company's bribery offenses;
• Extensive extra-territorial powers of prosecution similar to those found in the U.S. Foreign Corrupt Practices Act ("FCPA");
• Offenses apply to both public and private sectors (unlike the FCPA);
• No carve-out for facilitating or "grease" payments (unlike the FCPA)
• Conviction could mean debarment from all public sector contracts within the European Union.

This legislation comes at a time of increased international co-operation between regulators not only in matters relating to bribery, including enforcement of the FCPA, but in connection with financial fraud, insider dealing and related activities. The extensive powers provided by the Act will be used by UK enforcement agencies such as the Serious Fraud Office ("SFO") to clamp down on corrupt behavior. The Bill received Royal Assent on 8 April 2010 and its various provisions are likely to be bought into force over the next six months.

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Articles in This Issue:

• Reading, Writing, and Export Control: Lessons Learned from Professor Roth
• Conducting Discovery in the United States for Cases Pending Abroad
• The Evolution of the FCPA’s ‘Knowledge’ Requirement
• Twitter, Facebook and Instant Messaging – The Export of Personal Communication Capabilities to Iran, Cuba and Sudan
• Daimler Statement Over Corrupt Practices Approved
• Enforcement Highlights

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This post was written by Edward Miller.

The final release of the Commission's new block exemption on vertical restraints and accompanying Guidelines (see ec.europa.eu/competition/antitrust/legislation/vertical.html) confirms that the Commission has made few changes, and in many places has simply updated the law to reflect case law of the European Court since the last version of the exemption was adopted in 2000.  Although the Commission retains its enthusiasm for liberalising internet selling, the changes will not satisfy the ambitions of internet sellers for a European free for all on the Internet.  The Commission's desire to curb buyer power by requiring that both buyer's and seller's market share must now not exceed thirty per cent to obtain the benefit of the exemption in all cases, will create some new compliance issues for firms which either are, or trade with powerful buyers.  But no need to panic as the Commission has generously allowed a one year transitional period to get into compliance.

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This post was written by Hugh Scogin, Mao Rong, and Zack Dong.

In November 2009, the Ministry of Science and Technology, the National Development and Reform Commission and the Ministry of Finance jointly issued Notice No. 618, requiring enterprises registered in China to apply for accreditation of indigenous innovation products. The program would have provided the Ministry of Science and Technology with authorization to prioritize accredited products for government procurement. Of particular interest to foreign enterprises were requirements that an applicant's use, disposal and improvements to a relevant product's intellectual property (IP) must not be subject to foreign restrictions, while any trademark used would first require registration in China and would also need to be free of restrictions from any related foreign brands. Under this program, foreign-invested companies whose products are not locally developed would not be able to participate equally with their Chinese competitors in government procurement unless they agreed to take the risk of removing licensing restrictions from their IP. In response to the notice, foreign associations and business leaders expressed concern that the system promoted domestic favoritism and would potentially result in discriminatory requirements for companies looking to take part in the government procurement market, while also restricting the capacity for innovation and development in China.

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