This post was also written by Simon Hart.
On January 13, 2010, the London Evening Standard reported that Prime Minister David Cameron’s office has ordered a review of the new UK Bribery Act as a result of strong concerns expressed by UK business leaders and others about the potential adverse impact the Act might have on the British economy. The Act has the effect of potentially criminalising corporate gift-giving, facilitation or “grease payments” and hospitality, regarded by many as vital to doing business abroad. The review will be conducted by a committee chaired by the Chancellor of the Exchequer and the Business Secretary whose charge is to scrutinise a broad range of regulations which are perceived as hindering business growth.
That same day, Vivian Robinson, the General Counsel of the Serious Fraud Office (SFO), the agency responsible for enforcing the sweeping anti bribery law, predicted that the review would not result in any “transformational changes” to the Act and may only impact the formal guidance on the Act that is to be published by the UK’s Ministry of Justice. That said, Mr. Robinson also stated that we can expect to see the formal guidance issued by the end of January. [For our posting on the Ministry’s consultation with industry which has taken place in relation to the guidance, see link ]. If that is the case then the effective date of the Act will remain on track for April 2011.
Whether there will be revisions to the guidance as a consequence of the review remains to be seen. However, given the extensive history and debate that preceded Parliament’s enactment of the Act and the attendant worldwide publicity that followed, companies should still expect to see stringent new anti-bribery laws come into force in the UK in 2011. Companies in the UK and the US should be interested in what those responsible for enforcing the Act are saying about some of its key provisions even before publication of the formal guidance.
Speaking during a wide ranging discussion of how the SFO might enforce the Act, and its potential impact on both companies and individuals who might come within the reach of the Act, Mr. Robinson predicted that the UK courts will interpret the Act “broadly”. As to how the SFO sees the various provisions of the Act, comments of both Mr. Robinson and Richard Alderman, the Director of the SFO, in the past several months have underscored that there cannot be a one size fits all response to the statute. Companies should consider not only their corporate structure, but the nature of their business and their business partners and associations in crafting a compliance program which meets the requirements of the Act. Messrs. Alderman and Robinson have stated that they are encouraging companies to come and speak with them prior to the anticipated April 2011 effective date to obtain the SFO’s guidance in areas of uncertainty. Mr. Robinson noted that companies have responded to this invitation and that the SFO was “encouraged” by the number of businesses that had contacted them.
Other key discussion points made by Mr. Robinson included:
- In this era of “global” anti-corruption cases the SFO did not intend to defer to the United States’ prosecution of UK or other companies that fall under the jurisdiction of the Act.
- The SFO encourages self reporting and will consider whether a company self reported under the Act in deciding whether to prosecute criminally or to pursue a civil recovery order, which is closer to US deferred prosecution agreements (DPAs). In an aside, Mr. Robinson noted that “lots of us” think there is merit to DPAs.
- Commenting on prosecuting for payment of facilitation payments, Mr. Robinson stressed that the SFO will look at the totality of the circumstances in deciding whether to prosecute.
Reed Smith’s Global Regulatory Enforcement lawyers in the UK and US will be publishing a detailed discussion on the guidance for our clients as soon as it is published by the UK’s Ministry of Justice.