Mitigating Risks and Ensuring Compliance under the UK Bribery Act

The United Kingdom Bribery Act of 2010 (“UKBA”) is the primary anti-corruption legislation in the United Kingdom. It has been in force since July 2011 and covers bribery in both the public and private sectors. This Act is one of the most rigorous anti-corruption laws in the world and applies to domestic organizations, individuals, and UK-based organizations working overseas. The legislation makes it illegal for individuals and businesses to offer, promise, or give a bribe, as well as to solicit, agree to receive, or accept a bribe.

The United Kingdom Bribery Act is widely regarded for its uncompromising stance against corruption and has served as a model for anti-bribery laws in other countries.

The statute defines a bribe broadly, including not only monetary contributions but also gifts, hospitality, and other benefits. Furthermore, the legislation introduced a new corporate offense of failing to prevent bribery, which applies to all firms of any size. This implies that corporations can be held accountable for bribes made on their behalf by employees, agents, or other affiliated individuals.

The Complexity of Tackling UK Bribery Act Compliance

The UKBA, along with the US Foreign Corrupt Practices Act (FCPA), is widely regarded as the most rigorous anti-corruption legislation in the world. The Act’s jurisdiction is nearly universal, allowing for the prosecution of individuals or corporations with ties to the United Kingdom regardless of where the offense occurred.

The UKBA presents a significant risk of liability for businesses, directors, and individuals, and its reach is even broader than that of the preceding FCPA. Compliance with this Act is crucial for British companies operating overseas, as violating the UKBA can result in severe consequences, including fines, asset seizure, and imprisonment.

The UKBA defines two primary offenses: offering or giving an “advantage,” and requesting, agreeing to receive, or accepting an “advantage.” The Act goes beyond these broad statements by emphasizing the prohibition of bribery of foreign officials and commercial entities, as well as the importance of effective policy implementation to prevent bribery.

Infractions under the UK Bribery Act

The United Kingdom Bribery Act of 2010 encompasses a variety of offenses relating to bribery and corruption, including:

Bribing a foreign public official: This offense involves offering, promising, or giving an advantage to a foreign public official with the intent of inducing them to carry out their duties improperly, or in exchange for performing their functions improperly.
Bribing another person: This offense entails offering, promising, or giving an advantage to anyone other than a foreign public official with the intention of inducing them to perform their functions improperly.
Failure of commercial organizations to prevent bribery: This offense encompasses commercial organizations that do not take appropriate measures to prevent individuals associated with them from bribing others to gain or retain business or an advantage in conducting business.

Consequences of Noncompliance with the UKBA

Individuals who breach the UK Bribery Act can face up to ten years in prison and unlimited fines, depending on the severity of their actions. Companies that violate the Act can face unlimited fines, also depending on the gravity of their offenses. Moreover, companies and individuals may face several other consequences, including:

Being barred from bidding on public contracts;
Being subject to confiscation orders;
Prohibition of company directors from acting as directors for up to 15 years in cases of misconduct.

The Golden Shield of ‘Adequate Procedures’ for Companies

If a company is convicted of a bribery charge, the only defense available to them is the claim of ‘adequate procedures’. This defense implies that the company had appropriate measures in place to prohibit employees from engaging in bribery.

However, in R v. Skansen Interiors Ltd, Southwark Crown Court (2018), the jury was unsatisfied with the company’s processes for preventing bribery by a senior employee. This was the first instance where the ‘adequate procedures’ defense was tried in court. The case provides insight into the factors that a jury may consider when determining whether anti-bribery procedures are indeed “adequate”.

The UK Ministry of Justice guidelines accompanying the UK Bribery Act emphasize repeatedly that an adequate bribery strategy must be proportional to the bribery risks that an organization faces. The Ministry’s six guiding principles provide a structure for these adequate procedures.

Implementing Effective Anti-Bribery Procedures: A Necessity for Companies

Compliance with the UK Bribery Act requires organizations to have robust systems in place to prevent bribery. To help organizations achieve compliance, the UK Ministry of Justice has published official guidance outlining six principles that commercial entities can adopt:

Proportionate Procedures: The compliance procedures under the Act require the development of clear rules and processes to avoid and detect bribery. These guidelines should be followed by officials and individuals. Organizations must ensure that their procedures are proportional to the risk of bribery within the company.
Gain Commitment from Top Management: The compliance procedure enables the establishment of an internal anti-corruption committee. It is essential for top-level officials to take part in the committee and ensure the proper involvement of all key stakeholders.
Conduct Risk Assessment: After determining the size and structure of the organization, it is crucial to conduct risk assessments. This procedure should be utilized to review, implement, and enhance policies and processes necessary to achieve compliance.
Perform Due Diligence: Regular due diligence on workers, agents, and third parties is essential. The Act emphasizes the importance of due diligence to regulate the accountability of all stakeholders.
Staff Training: Organizations should provide regular anti-bribery training to staff and take proper disciplinary action when warranted. This ensures that everyone is well-versed with the laws and regulations.
Monitor and Review: Evaluating the effectiveness of the anti-bribery program among employees can identify loopholes that need to be addressed and enable organizations to adapt to new procedures.
Companies in Violation of the UKBA

The UKBA has been praised for its broad scope and comprehensive measures in combating bribery and corruption. The legislation’s near-universal jurisdiction has made it one of the strictest anti-bribery laws in the world. As a result, many major corporations have been fined since its introduction. Some notable cases include:

In 2014, the UK printing company Smith & Ouzman became the first company to be convicted for paying bribes to secure contracts in Kenya and Mauritania, making it the first-ever corporate conviction under the Act.
Sweett Group, a UK-based construction firm, was fined £1.4 million in 2015 for failing to prevent bribery in the Middle East, resulting in a conviction under Section 7 of the Act.
In 2019, the Serious Fraud Office (SFO) charged a former senior executive of the engineering company Alstom with bribery and corruption offenses, with fines of up to £16.4 million relating to allegations of bribes paid to secure contracts in Tunisia.
The UK’s SFO secured a deferred prosecution agreement with the transportation company Serco in 2020, which agreed to pay £19.2 million for failing to prevent bribery in relation to contracts in the Middle East and the UK.
In 2021, the SFO charged the UK oil and gas company Petrofac with seven separate offenses related to bribery and corruption between 2011 to 2017 in Iraq, the UAE, and Saudi Arabia.
In 2021, the Serious Fraud Office confirmed that GPT pleaded guilty to corruption between December 2008 and July 2010 in relation to contracts awarded to GPT in respect of work carried out for the Saudi Arabian National Guard.

These cases demonstrate the UK’s commitment to enforcing the provisions of the Act, serving as a warning to individuals and companies to take anti-bribery measures seriously.

How Can You Combat This Challenge?

Navigating the breadth and contours of various domestic and international anti-corruption legislations can be challenging, and any misstep can have significant reputational and financial consequences. At Rainmaker, we offer ABAC training that can be customized to meet specific requirements. Our comprehensive e-module, “WorkBAC,” provides great insight into compliance requirements regarding bribery and corruption. Reach out to us today and get started with our flagship solutions!

Author: Vidhi Krishali, Research Associate, Law, Rainmaker Directions and Contributions: Akanksha Arora, AVP-Legal, Rainmaker

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