Canada: Update On U.K. Bribery Act 2010

Copyright 2011, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Business, May 2011

On March 30, 2011, the U.K. Ministry of Justice (MOJ) announced that the U.K. Bribery Act 2010 (the Act) will enter into force on July 1, 2011.

This article is an update of our October 2010 Blakes Bulletin: U.K. Bribery Act 2010: Extending the Long Arm of Global Anti-Corruption Enforcement. Since then, some notable developments have occurred, including the now definitive in-force date and the release of the MOJ's Guidance (MOJ Guidance) and the Serious Fraud Office's Joint Prosecution Guidance (Prosecution Guidance).

Since the last Blakes Bulletin, the Act has been subject to criticism by U.K. and multinational businesses as lacking sufficient certainty around the rules of the game. The areas of the Act generating the most interest are:

  • Applicability of the Act: What constitutes "carries on a business" in the U.K.
  • Corporate Hospitality
  • Facilitation Payments
  • Corporate Liability for "Associated Persons"
  • Adequate Procedures Defence

Rather than provide bright-line legal tests, the MOJ has favoured leaving the Act as a broadly drafted text, tempered by broad prosecutorial discretion whether or not to prosecute.

The MOJ Guidance is meant to provide businesses with guidance on how the Act is to be interpreted, while the Prosecution Guidance is meant to provide prosecutors with guidance as to when it is appropriate to prosecute.

Businesses should be aware of the guidance provided by the MOJ Guidance and Prosecution Guidance in the following areas.

Applicability of the Act: What constitutes "carries on a business" in the U.K.?

The Act is extraterritorial, meaning that, in addition to U.K. individuals and businesses, it will also apply to a non-U.K. entity that "carries on a business, or part of a business, in any part of the United Kingdom".

The MOJ Guidance advises that the courts will ultimately interpret what it means to carry on business in the U.K. The MOJ Guidance suggests that a London Stock Exchange listing by a foreign company would not in itself be a sufficient connection to constitute carrying on business in the U.K. Additionally, the MOJ Guidance advises that having a U.K. subsidiary will not in itself mean that the parent company is carrying on business in the U.K. Nevertheless, it remains to be seen how the courts will interpret "carries on a business, or part of a business". While a London listing or U.K. subsidiary may not by themselves constitute sufficient connections, it would be prudent to view these as relevant indicia that may form part of a larger fact-dependent inquiry.

Corporate Hospitality

The MOJ Guidance clarifies that it is not the intention of the Act to criminalize bona fide hospitality or other customary business development expenditures. Thus, under the Act, businesses can continue to offer corporate hospitality such as taking clients to sporting events, picking up dinner tabs and providing for reasonable travel and accommodation.

However, with respect to public officials, the MOJ Guidance advises that businesses may also provide "reasonable" hospitality or promotional expenditure. There will clearly be a higher level of scrutiny applied when public officials are involved versus private clients (to whom the Act also applies). Reasonableness is defined by reference to examples in the MOJ Guidance and is largely fact-dependent.

In addition, the MOJ Guidance recognizes that corporate hospitality can also be used to disguise bribes. Accordingly, the MOJ Guidance advises that such expenditures should be reasonable and commensurate with industry norms.

The Prosecution Guidance suggests that relevant factors in assessing whether corporate hospitality is actually a covert bribe include: lavishness; connectivity of the expense to a legitimate business activity; and whether or not the hospitality or expenditure was concealed.

Facilitation Payments

Facilitation payments are unofficial payments made to public officials in order to secure or expedite the performance of a routine or necessary action. Such payments remain prohibited under the Act. The MOJ takes every opportunity to note that facilitation payments were illegal under previous legislation and the common law. Nevertheless, this is an important contrast to the U.S. Foreign Corrupt Practices Act (FCPA) and the Canadian Corruption of Foreign Public Officials Act (CFPOA), which permit such payments.

While the MOJ Guidance states that facilitation payments are illegal, it also acknowledges that eradication of facilitation payments is a "long-term objective", perhaps implying that a small, one-off facilitation payment is unlikely to result in heavy sanction.

The Prosecution Guidance notes the following factors favouring prosecution:

  • large or repeated payments
  • payments that are a planned or accepted way of conducting business
  • payments that indicate an element of active corruption of a public official
  • cases where a business has a policy for dealing with such payments and the same has not been followed

Conversely, factors noted as tending against prosecution are:

  • a single small payment
  • a payment that came to light via self-reporting
  • a business has a policy for dealing with such payments and the same has been followed
  • circumstances where the payer was in a vulnerable position

Corporate Liability for "Associated Persons"

Under the Act, a business is liable for bribes made by "associated persons" which are intended to benefit the business. The MOJ Guidance acknowledges that there may be a broad scope of persons who constitute "associated persons", including contractors, suppliers and joint venturers.

The MOJ Guidance suggests that the degree of control that a business has over the associated person will likely be determinative of whether a person is an "associated person". Additionally, the MOJ Guidance suggests that control will usually extend to contractual counterparties. Regarding supply chains, the MOJ Guidance suggests that it is unlikely that a business will be in a position to control persons in the chain beyond the counterparty; however, it notes that businesses may request that counterparties impose similar anti-bribery measures on those down the supply chain. Regarding joint ventures, the MOJ Guidance notes that the existence of a joint venture will not in itself result in a finding that it is "associated" with any of its members.

Adequate Procedures Defence

Under the Act, a business is strictly liable for failures to prevent bribery. However, a business will not be considered to have committed an offence if it can demonstrate that it implemented "adequate procedures" to prevent bribery.

The MOJ Guidance suggests that what constitutes "adequate" will be relative to the nature, size and complexity of the business. Accordingly, for small businesses that face few bribery risks, minimal procedures may be adequate. Conversely, for large businesses operating in regions or industries where bribery is common, the content of what constitutes "adequate" is likely to be much higher.

The MOJ Guidance suggests six principles to help businesses assess their anti-bribery policies and procedures, including:

  • proportionality
  • top-level commitment
  • risk assessment
  • due diligence
  • communication
  • monitoring and review

What Should Businesses Do To Prepare for July 1?

In preparation for the July 1, 2011 in-force date, businesses should review their anti-bribery policies and procedures to ensure they are compliant and sensitive to the Act's requirements.

Businesses that are either unsure whether they are captured by the Act's jurisdiction, or that contemplate future operations in the U.K., should consider bringing their policies into compliance with the Act.

Additionally, businesses that are subject to the FCPA, the CFPOA and the Act should consider implementing policies that comply with the stricter of these standards.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.