New U.K. Bribery Act Creates More Pitfalls for Companies

The United Kingdom's new Bribery Act 2010, which received Royal Assent April 8 and is expected to be enacted by October 2010, extends far beyond the British Isles.

"The act is far-reaching; its scope is worldwide; its potential defenses unclear; and its sanctions include unlimited fines and prison terms of up to 10 years," says Marc Hansen, a partner at Latham & Watkins.

"Traditionally, British law limits corporate criminal liability to circumstances in which a person who is the 'directing mind' of the company is guilty of the offense," says Katherine Addleman, a partner at Haynes and Boone. "The Bribery Act, however, broadens corporate liability by making a company liable to criminal prosecution if anyone associated with it pays a bribe in connection with any aspect of its business."

Unlike its sister provision in the FCPA, this strict liability attaches to all types of business--not just large or unusual transactions, but mundane services such as connecting a telephone line.

Even if companies implement bribery prevention programs, Homer Moyer, a partner at Miller & Chevalier, believes the "adequate procedures" defense is a double-edged sword.

"On the one hand, there's nothing in the FCPA that is such an explicit incentive to good compliance," he says. "But the defense is also potentially a huge loophole for U.K. offenders."


Julius Melnitzer

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.