The introduction to Parliament on 25 March 2009 of the draft Bribery Bill(1)(the “Bill”) is an important landmark in the UK government’s efforts to fight bribery and corruption. The Bill proposes four principal offences to address the following scenarios: the giving of a bribe; the receipt of a bribe; bribery of a foreign public official; and the negligent failure by a corporate entity to prevent bribery.
Eleven Years In The Making
The Bill comes some eleven years after the English Law Commission’s (2)first proposals to reform the UK’s bribery laws(3)and two years since the UK government requested that the Law Commission revisit the legislation. In November 2008 the Law Commission published its report into reform of the law of bribery, describing the existing patchwork of legislation as “out-dated” and “unfit for purpose.” The Organisation for Economic Co-operation and Development (“OECD”) has identified the current legislation as one of the main barriers to effective prosecution of bribery and corruption in the UK. Launching the Bill, the Secretary of State for Justice, Jack Straw, acknowledged that the modernisation of existing laws in this area was “a priority.”(4)
The Draft Bill – The Two Basic Offences of Bribery and Being Bribed
The Bill provides that it will be an offence to bribe another person by giving, promising or offering a bribe. A bribe will amount to a “financial or other advantage.” This phrase is not defined, but is left to the courts to interpret. The Bill targets circumstances in which the bribing party intends to bring about or reward improper performance of a function or activity, and circumstances in which the bribing party knows or believes that the receipt of the bribe in itself amounts to improper performance.
It will also be an offence to be the subject of bribery by requesting, agreeing to receive or accepting a bribe (whether or not the party in fact receives a bribe). For example, an offence will be committed where a party engages in improper performance in anticipation or in consequence of a bribe or agreement to accept a bribe.
The Bill provides that bribery can occur in the context of both public and private functions (i.e., in the course of trade and business) where there is an expectation that dealings are to be carried out in good faith or impartially, and where the person performing the function is in a position of trust. In each case, the proposed legislation is broad enough to catch bribes routed through a third party or agent.
Offence Of Bribing Foreign Public Officials
In line with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions,(5) the Bill proposes to introduce an offence of bribing a foreign public official (which includes both government and international organisation officials). The most salient provisions of this portion of the Bill are as follows:
- Like the U.S. Foreign Corrupt Practices Act (“FCPA”), this offence does not cover the receiver of the bribe.
- A bribe payer will commit an offence even if the bribe is paid to a third party at the request or direction of the foreign public official.
- The bribe payer must intend to influence the recipient of the bribe or obtain business or a business advantage, even if the official does not have the power or authority to act in the manner intended by the bribe giver.
- The bribe must consist of a benefit not “legitimately due” to the recipient; it is irrelevant as to whether the action for which the bribe has been given is improper or not.
- A payment will not be considered an illegal bribe where the payment is legitimately due to the foreign public official under the law of that official’s country; however, it will not be sufficient to state that the paying of bribes is customary or unofficially sanctioned in the relevant country.
Offence For Commercial Organisations Negligently To Fail To Prevent Bribery
Perhaps one of the more controversial aspects of the Bill is the proposal that a “commercial organisation” may commit an offence of negligently failing to prevent bribery. The definition of commercial organisation is wide in scope, meaning that domestic and international companies are at risk of committing an offence. The Bill covers:
- A corporate body incorporated in England & Wales or Northern Ireland and carrying on business there or elsewhere;
- A partnership formed under the laws of England & Wales or Northern Ireland and carrying on business there or elsewhere; or
- Any other body corporate or partnership wherever incorporated or formed which carries on business in England & Wales or Northern Ireland.
The key factors therefore are whether the relevant entity is incorporated in or “carries on business” in England & Wales or Northern Ireland – listing on a UK stock exchange is not a prerequisite.
This offence will relate only to the giving, offering or promising of bribes made in connection with an organisation’s business. The prosecution authorities will need to show negligence on behalf of the person responsible for preventing bribery in failing to prevent the bribery. In the absence of such a person, an offence will be committed where a senior official (a director, secretary or manager, partner or similar official with control of an organisation) negligently fails to prevent bribery.
There is an important proposed defence. A commercial organisation will not be guilty of this offence if it can show that “adequate procedures” have been put in place to prevent bribery and the negligence is not on the part of a senior official such as a director or manager.
Geographic Scope Of The Bill
A party may commit an offence of giving or receiving a bribe, or bribing a foreign public official, if any element of the offence takes place in England & Wales or Northern Ireland.(6)
Proceedings may also be brought in England & Wales or Northern Ireland even if no part of the giving or receiving of a bribe or bribing a foreign public official takes place in England & Wales or Northern Ireland, where that conduct would form part of an offence if performed in England & Wales or Northern Ireland and it is performed by a person with a “close connection” with the UK. Those with a “close connection” are defined to include British citizens, individuals ordinarily resident in any part of the UK and bodies incorporated under the law of any part of the United Kingdom.(7)
The location of the bribery is irrelevant for the purposes of the corporate offence of negligently failing to prevent bribery.
How Prosecutions May Be Brought
The Bill provides that one of the Director of Public Prosecutions, the Director of the Serious Fraud Office and the Director of Revenue and Customs Prosecutions may bring prosecutions for these offences in England & Wales.(8)
Potential Penalties
The Bill introduces serious penalties: an individual found guilty of an offence will be liable to an unlimited fine or to a jail sentence of up to 10 years; a body corporate guilty of an offence will be liable to an unlimited fine.
Reaction To The Bill and Next Steps
The introduction of the Bill has been enthusiastically received: Richard Alderman, Director of the Serious Fraud Office (“SFO”), commented that the legislation provides “an excellent step forward in providing a modern legislative framework to tackle alleged bribery”; and the head of the Economic Crime Department at the City of London Police has suggested that had appropriate legislation been in place earlier the UK authorities would have been more effective in “seeking out the full extent of corporate criminal liability”.(9)
However, both may have to wait a little longer - the race will now begin to get the Bill through Parliament before the next UK General Election, which must take place by Spring 2010. If the Bill does not pass through the pre-legislative scrutiny in both Houses of Parliament before the election it may be 2011 at the earliest before a new “Bribery Act” is in place. The legislation will not be retrospective.
Comment – A Focus on Compliance Programmes for Corporates
The Bill marks another step by the UK government to tackle corruption both at home and abroad and goes some way to confirming that the UK is intent on changing the perception that it is not making serious efforts to take enforcement action for corruption offences. The publication of the Bill follows the first successful UK prosecution for overseas bribery (October 2008), the first civil settlement reached by the SFO (with Balfour Beatty, November 2008) in relation to reported suspicious payments(10)and the levy by the Financial Services Authority of a record fine for financial crime, for failures of systems and controls which did not detect suspicious payments (the Aon case, January 2009).(11)
The provision for corporate criminal liability for negligently failing to prevent bribery is a major difference from U.S. law under the FCPA, the most renowned piece of legislation in this area. Under U.S. law, a company may be responsible for the actions of its employees through the theory of respondeat superior; i.e., if an employee bribes, the company is liable. Although the parameters of the “adequate procedures” defence supplied by the Bill are unclear, there is an expectation that an organisation will be proactive in putting in place policies and procedures to prevent and detect bribery and corruption. Given that the potential penalties for individuals and corporates are serious, UK corporates and other entities carrying on business in the UK would be well advised to design, implement and monitor effective anti-corruption policies and procedures, the likes of which have become increasingly common in the U.S. over the past few years. In doing so, businesses should consider whether the structure of those policies and procedures will automatically preclude the “adequate procedures” defence.
There are many nuances to the Bill which will need to be worked out as it passes through parliamentary scrutiny and in practice in the Courts. However, the message is clear: the UK aims to stand at the forefront of the global fight against bribery and corruption.
This article was prepared by Alex H. Rene ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it or +44 20 7832 3663), a partner in the Washington, D.C. office of Fulbright & Jaworski L.L.P. and currently practising in the London office of the firm (and a former trial attorney in the Department of Justice’s Criminal Division, Fraud Section); William B. Jacobson ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it or +1 202 662 4515), a partner in the Washington, D.C. office of Fulbright & Jaworski L.L.P. (and the former Assistant Chief for FCPA Enforcement in the Department of Justice’s Criminal Division, Fraud Section); Richard C. Smith ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it or +1 202 662 4795), a partner in the Washington, D.C. office of Fulbright & Jaworski L.L.P., Chair of the White Collar and Government Investigations and Enforcement Practice Groups and the former Principal Deputy Chief of the DOJ's Fraud Section; Antony Corsi ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it or +44 20 7832 3659), a partner in Fulbright & Jaworski International LLP in London and a member of the firm’s Global Disputes practice group; and Ian Pegram ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it or +44 20 7832 3645), a professional support lawyer in the Disputes Practice at Fulbright & Jaworski International LLP. Visit Fulbright's White Collar Crime Practice Group and Government Investigations Practice Group for more information.
[1] The Draft Bill is available at: http://www.justice.gov.uk/docs/draft-bribery-bill-tagged.pdf
[2] The English Law Commission is an independent apolitical body, established by the UK Parliament in 1965 to keep under review the laws of England and Wales, and to recommend reform where needed.
[3] Law Commission Report: Legislating the Criminal Code: Corruption 1998 report No. 248
[4] Ministry of Justice press release dated 25 March 2009: http://www.justice.gov.uk/news/newsrelease250309a.htm
[5] http://www.oecd.org/document/21/0,3343,en_2649_34859_2017813_1_1_1_1,00.html#Text_of_the_Convention
[6] It is important to note that no offence under draft Bill will be committed if the conduct takes place solely in Scotland. It will be a matter for Scottish law as to whether an offence has been committed in this case.
[7] Others who may satisfy the "close connection" test include: British Overseas Citizens; British Nationals (Overseas); Persons who under the British National Act 1981 were a British subject; and protected persons under that Act.
[8] In Northern Ireland, the prosecution must be brought by either of the Director of Public Prosecutions for Northern Ireland or the Director of the Serious Fraud Office.
[9] Ministry of Justice press release dated 25 March 2009: http://www.justice.gov.uk/news/newsrelease250309a.htm
[10] "Two Recent Cases Show UK is Active in Enforcement of Foreign Bribery Laws," Fulbright & Jaworski L.L.P. Briefing, October 2008: http://www.fulbright.com/index.cfm?fuseaction=publications.detail&pub_id=3619&site_id=494&detail=yes
[11] "FSA Joins the Enforcement Party in Landmark Financial Crime Action," Fulbright & Jaworski L.L.P. Briefing, January 2009: http://www.fulbright.com/index.cfm?fuseaction=publications.detail&pub_id=3711&site_id=494&detail=yes