The U.K. Bribery Act, set to go live on July 1st after much delay, has been the focus of much prognostication and the foundation for many marketing initiatives.
In this post, I highlight two recent events - one sensible, the other senseless.
Mark Miller (a partner at Baker Botts - see here) recently published "The U.K. Bribery Act 2010 - Enforcement is the Rest of the Story" in BNA's White Collar Crime Report. See here.
Miller sensibly notes as follows.
"Much of the commentary about the new U.K. Bribery Act 2010 has been filled with alarm that the new law will be even stricter—and therefore more dangerous—than the U.S. Foreign Corrupt Practices Act. Although there are ways in which the Bribery Act is stricter than the FCPA, that is not the whole story. The real measure of how dangerous the Bribery Act will be is not the provisions of the law itself but how that law will be enforced, and from indications so far, that is a big unknown."
Countering alarmist commentary of the Bribery Act - including that it represents a major change in law because facilitating payments are not allowed - Miller rightly points out "the predecessors to the Bribery Act (the Prevention of Corruption Acts 1889 to 1916 and the Anti-Terrorism, Crime and Security Act 2001) did not have exceptions for facilitating payments either ...".
Indeed this same point was noted by the U.K. Ministry of Justice in its March 30th guidance (see here). Can anyone point to a prior U.K. enforcement action concerning facilitating payments?
Miller also notes as follows. "The other Bribery Act provision usually pointed to as being stricter than the FCPA is the new offense described in Section 7, failure of commercial organizations to prevent bribery." However, Miller again sensibly notes as follows. "This appears to create a strict liability standard for companies whose employees, officers, or agents engage in bribery on their behalf. Although the FCPA itself contains no analogous provision, the standard in U.S. law for attributing criminal liability to corporate entities is similar. The more important distinction between the Bribery Act and U.S. law is that the former contains a defense for when the corporation is able to "prove that [it] had in place adequate procedures designed to prevent persons associated with [the corporation] from undertaking such conduct.'"
As to the Bribery Act's coverage of purely commercial bribery, Miller states as follows. "Another aspect of the Bribery Act has been pointed to as being broader than the FCPA: its prohibition against bribery of nongovernmental officials." Here again, Miller sensibly points out as follows. "True, the FCPA itself does not contain such a provision, but U.S. law does. The federal government routinely uses other statutes—such as the Travel Act and the mail and wire fraud statutes—to prosecute conduct that would not fall strictly within the FCPA’s prohibitions."
Miller then notes as follows. "The real story here is not the Bribery Act itself, because there is nothing truly revolutionary about it - except possibly the publicity it has generated. The real story is enforcement, and how the SFO will carry out its duties remains a big question mark." Miller then identifies several "reasons to believe that the SFO’s enforcement of the Bribery Act will turn out to be a less serious threat than U.S. enforcement."
All sensible observations and consistent with my own observations that "the Bribery Act may turn out to be more lenient than the FCPA" (see here) and that "enforcement of the U.K. Bribery Act will be disciplined and measured." (See here).
The alarmist commentary Miller spoke of in the above article was on display last week as Deloitte issued a press release (here) stating that "few business professionals are familiar with UK Bribery Act taking effect July 1."
According to Deloitte's own survey results - results not actually released - 73% of "business professionals" participating in a Deloitte webcast "earlier this year" said "they are not familiar with provisions in the U.K. Bribery Act." The leader of Deloitte's FCPA "consulting services practice" is quoted as saying that "organizations should focus on expanding their anti-corruption programs beyond FCPA to fully address the new Bribery Act 2010 provisions.”
What Deloitte's release doesn't mention is that its own survey took place on January 18th (see here) - a time when it was uncertain if or when the Bribery Act would ever go live and a full two months before the U.K. Ministry of Justice released (here) extensive guidance and case studies on the Bribery Act.
Against this backdrop, it is surprising not that 73% of "business professionals" were not "familiar" with the Bribery Act, but that 27% of "business professionals" were familiar with the Bribery Act.
Is it often that the majority of "business professionals" are "familiar" with a foreign law months before the law is scheduled to go live?