There has been further progress in the United Kingdom regarding
the proposed anti-bribery legislation and the ongoing investigation
into BAE Systems by the Serious Fraud Office.
The UK Justice Secretary, Jack Straw MP, has announced the
launch of the government's foreign bribery strategy. It builds
upon the government's anti corruption work over the past 3
years and aims to help strengthen its reputation as one of the
least corrupt countries in the world.
The strategy aims to:
modernise and strengthen the UK law on bribery by enacting a
new Bribery Act
encourage and support UK companies to establish and apply
appropriate standards of ethical business conduct to combat foreign
support effective law enforcement against foreign bribery and
take proportionate action against those benefiting from foreign
reduce the demand for foreign bribery by strengthening
international anti-corruption efforts
The announcement by the UK Justice Secretary confirms that, as
is the case in the United States of America, anti corruption has
become a strong priority for the UK government and the strategy
announced will assist in overcoming past criticisms of its
perceived weak response to bribery and corruption.
Of major significance to Australian Corporations is that if they
conduct any part of their business (which is undefined) in the UK
then they will be subject to UK jurisdiction and potential criminal
prosecution, even if the bribe and related matters have no
connection with the UK or the business which is operated in the
The Bribery Bill passed through the House of Lords for its first
reading speech earlier last week and it is thought that it may
become law at about the end of April. The latest version of the
Bribery Bill can be accessed
The foreign bribery strategy can be accessed
here (80 KB pdf).
There have also been further developments in relation to the
investigation of BAE Systems by the Serious Fraud Office
(SFO) in the UK and by the US Department of
On 5 February 2010 the SFO issued a news release in which it
announced that the SFO and the DoJ have reached a global agreement
with BAE Systems. The agreement with the SFO relates to BAE
Systems' operations in Tanzania whilst the agreement with the
DoJ relates to BAE Systems' business dealings in a number of
The agreement between SFO and BAE Systems is that BAE Systems
will plead guilty in the Crown Court to an offence under section
221 of the Companies Act 1985 for failing to keep reasonably
accurate accounting records of its activities in Tanzania. BAE
Systems will pay Ł30 million comprising a financial order to
be determined by a Crown Court judge with the balance being an ex
gratia payment paid for the benefit of the people of Tanzania. In
reaching this agreement the SFO has taken into account the
substantial ethical compliance reforms implemented by BAE Systems
and the company's agreement with the DoJ.
The DoJ has announced that it has filed a criminal charge in the
US District Court for the District of Columbia against BAE Systems
in which it has alleged that BAE Systems conspired to impede the
lawful functions of the Department of Defence and made false
statements about establishing an effective anti corruption
compliance program in conformance with the Foreign Corrupt
Practices Act. BAE Systems has announced that it will plead guilty
to that charge and that the total fines which it will pay to the
SFO and the DoJ will be more than $400 million.
Whilst BAE Systems has stated that the agreements which it has
reached do not relate to accusations of corruption or bribery, what
these agreements do indicate is that the SFO and the DoJ are taking
a much more firm and diligent approach. That will no doubt
continue. It can also be expected that the focus of the SFO and the
DoJ will not only be on corporations but also on individuals and
that prosecutions will be launched against both if contraventions
are found to exist.
If you have any queries about the strategy which has been
announced or other issues relating to business ethics and anti
corruption, please do not hesitate to contact
Jason Noakes or
Peter Cash. More information about our capabilities in this
area, particularly outside Australia, can be found
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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