New UK Bribery Act Rules Reveal Tougher Stance on Corruption

On October 9, the UK’s Serious Fraud Office (SFO) published new guidelines for the UK Bribery Act, setting the stage for significantly stricter enforcement of the anti-bribery law. Raymond Sweigart of law firm Pillsbury explains:

“The SFO now says that it will prosecute under the Bribery Act based primarily on the statute itself rather than on previous, more lenient and somewhat subjective guidance principles issued after the new law was introduced in July 2011. The newly announced policy had been predicted by many observers based on promises to tighten up enforcement made by the current director, David Green QC, on his appointment this past May.”

For the SFO, it’s an opportunity to get back to the basics of fighting corporate criminal activity, write Gary DiBianco and Matthew Cowie of law firm Skadden Arps:

“The revised policies and Q&A emphasise that the SFO ‘is primarily an investigator and prosecutor of serious and/or complex fraud, including corruption’ … [and] that ‘it is not the role of the SFO to provide corporate bodies with advice on their future conduct.’”

For your reference, an overview of the three key changes:

1. On self-reporting:

“Self-reporting has been ‘down graded’ to a factor that prosecutors will take into account when they decide whether or not to pursue a company and prosecute… The new guidance makes clear that ‘Self-reporting is no guarantee that a prosecution will not follow’ and ‘there will be no presumption in favour of civil settlements in any circumstances’.” (Baker & McKenzie Australia)

2. On facilitation payments:

“In the Revised Policies Announcement, the SFO reiterates that ‘[a] facilitation payment is a type of bribe and should be seen as such. A common example is where a government official is given money or goods to perform (or speed up the performance of) an existing duty.’ The approach contrasts with the FCPA where the payment of a facilitation payment, even to a government official, may come within an exception. In practice, however, this exception has narrowed in recent years, and as a result, the SFO’s restatement may make little difference. (Duane Morris)

3. On corporate hospitality:

“The new test for whether or not a company will face prosecution for corporate hospitality will now simply be based on whether or not there is ‘a realistic prospect of conviction’ and ‘it is in the public interest to do so.’ Previously the SFO had attempted to provide companies with assurance that ordinary and customary hospitality would not be prosecuted and that it would take into account a number of factors such as whether a company had rules about entertaining, whether the expenditure was proportionate and how the expenditure was recorded by the company in its books and records.” (Pillsbury)

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