International Law and Immigration

Ca. Int'l Law Journal SPRING 2014, VOL. 22, NO. 1

If You Conduct Business On A Transnational Scale, Don’t Leave Home Without An Anti-Bribery Compliance Program

By Marc R. Greenberg1

While corporate gifts, perks, incentives, and facilitation payments may be engrained in how business is conducted in various parts of the world, criminal prosecution of this type of influence pedaling is on the rise around the globe.2 A global coalition against corruption was created in 1993 and is now active in over 100 countries. The goals of the coalition are the creation of international anti-corruption conventions and the prosecution of corrupt leaders, all as part of an effort to hold companies accountable for corruption.3 One of the leading efforts is currently underway in the United Kingdom ("U.K.").

The U.K. Bribery Act of 2010 ("U.K. Act") became effective on July 1, 2011.4 While the U.K. Act is similar in approach to the U.S. Foreign Corrupt Practices Act ("FCPA") in that they both have the goal of removing bribery from company practices, the U.K. Act is significantly broader in scope because it reaches beyond bribes to public officials or public contracts. Moreover, it is not necessary for the contract or bribe to have a direct connection to the U.K. The U.K. Act applies as long as the company whose employee or agent offered the bribe has operations, offices, or employees within the U.K.5 For example, a lavish gift by an employee or agent to a business prospect in Uganda may result in criminal liability for your company if you have offices in, or do business in, the U.K.

The reach of the U.K. Act is similar to U.S. criminal laws concerning corporate vicarious liability. The U.K. Act imputes the state of mind of those who represent the "directing mind" of the corporation to the company.6 It restricts vicarious corporate liability, however, to those in management. Contrary to U.S. laws, it does not extend to every employee in the company. In Tesco Supermarkets Ltd. v Nattrass7 a U.K. court restricted the application of vicarious liability to the actions of the Board of Directors, Managing Directors, and other senior officers carrying out management functions. The liability exists for the acts of these individuals even if the act was done in in violation of company policy and victimized the company itself.8

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