UK Bribery Act

The United Kingdom Bribery Act of 2010 makes it unlawful for a UK citizen or any person residing in the country to receive or pay a bribe, either indirectly or directly. It refers to the primary law in the UK concerning anti-corruption aimed to minimize corruption in the nation.

This law’s provisions apply to both private and public sector bribery. It came into effect in July 2011 and covers UK residents and citizens. Moreover, they cover all organizations originating from the UK or carrying out business in the nation. This act only considers bribery an offense; it does not deal with any other type of white-collar crime.

• UK Bribery Act refers to a law in the United Kingdom that punishes both private and public bribery. It aims to minimize or eliminate bribery in the country.
• This act has six principles. Two noteworthy ones are the risk-based approach and risk assessment and review and tracking of anti-bribery activities.
• UK Bribery Act maximum fine is unlimited when the indictment or conviction occurs in a Crown Court. Also, in such cases, the maximum jail term is 10 years.
• A key difference between the UK Bribery Act and FCPA is that the latter deals with offenses related to public bribery only.

The UK Bribery Act aims to deal with the risks associated with corruption and bribery as they undermine corporate governance and cause damage to economic development. It refers to the most important anti-corruption law in the United Kingdom. Per this act, a bribe is a benefit provided by an individual or an organization to dishonestly persuade another individual or organization to work in a way that favors the former.

Note that a bribe can be direct or indirect. This means the person who is dishonestly persuaded, i.e., the bribee, may or may not receive the bribe directly from the briber. The provisions of this act have extra-terrestrial reach. In other words, bribery does not have to occur in the UK, and the provisions apply to non-UK organizations as well if they carry out business-related operations in the UK or a part of the bribery arrangement takes place within the geographical borders of the country.

The introduction of the act aimed to improve the UK laws concerning bribery to address the OECD (Organization for Economic Cooperation and Development) anti-bribery Convention of 1997 requirements. From a global standpoint, this act is one of the strictest legislations concerning bribery. It introduced a stern liability offense for partnerships and companies that fail to prevent bribery.

The act places a burden of proof on organizations to show that they have sufficient processes to prevent bribery. Also, it outlines that organizations and individuals engaging in bribery will be subject to penalties.   

The principles of this act are as follows:

#1 - Procedures Proportionate To The Business

Based on a business’s scale and nature and the bribery risks faced by it, the organization must adopt proportionate procures, such as contractual enforcements, financial controls, punishments, and policies that can prevent bribery.  

#2 - Risk Assessment And Risk-Based Approach

The bribery risk faced by an individual or organization must impact their measures’ proportionality. For that, they must regularly evaluate such risks and assess the effectiveness of the measures via certain practices, like conducting top-management-driven risk assessments and finding external and internal information sources associated with bribery.

#3 - Training For Employees And Communication

This principle is related to fostering an anti-bribery culture via regular communication regarding training and policies for every employee and associated person. The best practices may include setting up whistleblower policies and training departments prone to bribery. 

#4 - Top-Level Commitment Toward An Anti-Bribery Culture

The top-level management must communicate and demonstrate their commitment to establishing and maintaining a culture within the organization that firmly discourages taking or giving bribes. 

#5 - Review And Monitoring Of Anti-Bribery Procedures

An organization needs to track its anti-bribery and bribery risk measures. It needs to review them at fixed intervals and whenever the regulatory, political, or business environment changes. Moreover, organizations must set up objective and subjective indicators of bribery 

#6 - Due Diligence Before Business Activities

Businesses must carry out due diligence on intermediaries acting on the organization’s behalf and associated persons. The due diligence level must be based on the third-party intermediaries’ sector, reputation, media reports, nation, and similar information.

This act includes the list of the following offenses:

• Offering bribes to a person to influence them to carry out inappropriate activities that benefit the briber. This includes bribing any senior company officer or director to do something favorable
• Providing bribes to a foreign public official so that they can do something that will be beneficial
• Failure of any commercial organization to prevent or fend off bribery on its associated persons’ behalf.
• The last offense in the list involves passive bribery, which means requesting or accepting bribes to carry out particular functions improperly.

Let us look at a few UK Bribery Act examples to understand the concept better.

Example #1

Suppose David is an employee of an England-based organization, Company ABC. He offered an all-expenses paid trip to a government official per the instruction of the top-level management. The purpose of the gift was to make the official reduce the tax liability of the organization. An investigation was carried out, and Company ABC was found guilty in a magistrate court. As a result, it had to pay of fine of £10,000. Moreover, David and two top managers of the organization were sentenced to a jail term of 6 months.

Example #2

In August 2023, the chief of staff of the Madagascan President was arrested in London on suspicion of looking for a bribe from Gemfields, a precious stone miner in the United Kingdom, to obtain licenses that are necessary to carry out operations in Madagascar.

Madagascan President Andry Rajoelina, her top aide Romy Andrianarisoa, and the latter’s French associate Philippe Tabuteau French were charged with offenses concerning bribery. Tabuteau and Andrianarisoa were reportedly seeking £225,000 or $286,000 as upfront charges. If convicted, both could face a maximum jail term of 10 years, per the UK Bribery Act 2010.

There are three separate enforcement jurisdictions in the UK — Northern Ireland, Scotland, and England and Wales. The Serious Fraud Office (SFO) may investigate complex overseas bribery or high-value bribery. In other scenarios, any relevant police force or the National Crime Agency takes the case forward. 

If organizations or individuals violate this act, they have to pay penalties based on their offense’s severity. Moreover, people might have to face jail time for engaging in bribery. Generally, in the case of conviction in any Magistrate’s court, the UK Bribery Act maximum fine is £5,000 in England, Northern Ireland, and Wales. On the other hand, it is £10,000 in Scotland. Moreover, the prison term is up to 1 year.

However, in the case of severe offenses, where indictment or conviction takes place in a Crown Court, there is a possibility of unlimited fines and a maximum jail term of 10 years. Note that in this scenario, the confiscation of property is also possible.

People new to the act often have confusion regarding the difference between the UK Bribery Act and the Foreign Corruption Practices Act(FCPA). The following are their distinct characteristics:

This article has been a guide to what is UK Bribery Act. Here, we explain its penalties, comparison with FCPA, offenses, principles, examples, and enforcement. You may also find some useful articles here -

• Financial Crime
• Corporate Fraud
• Malfeasance