Comparative Guides
Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.
Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.
Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.
Results: 4 Answers
Anti-Corruption & Bribery
3.
Corruption and bribery
3.1
How are gifts, hospitality and expenses treated in your jurisdiction?
 
UK
In guidance issued before the Bribery Act came into effect, the Ministry of Justice stated that there was no intention to outlaw all entertainment and hospitality.

The government stated when the act was set to become law that genuine hospitality and reasonable, proportionate business expenditure would not lead to prosecution. Any corporate spending on entertainment and hospitality is unlikely to attract official attention unless there are concerns that it is actually a covert form of bribery. Most companies draw up a manual or guidelines to assist employees regarding the distinction between minor gifts and commercial bribery.

A corporate should have appropriate policies and procedures for gifts, entertainment and hospitality in order to avoid allegations of bribery. But as the 2010 act provides no direct exemptions or assistance on what is acceptable and what is not, it is difficult to ascertain precisely what the limits are.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
3.2
How are facilitation payments treated in your jurisdiction?
 
UK
Facilitation payments have always been illegal in the United Kingdom, regardless of their size or frequency. That was the case before the UK Bribery Act came into force.

In deciding whether to prosecute in respect of facilitation payments, an enforcement agency will consider whether it is in the public interest to prosecute.

A prosecution is more likely if:

  • large or repeated payments have been made;
  • payments have been planned or accepted as part of a standard way of doing business;
  • payments indicate that there has been corruption of an official; or
  • there has been a failure to follow any existing policy regarding facilitation payments.
For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
3.3
How is bribery through intermediaries and other third parties treated in your jurisdiction? Can those third parties be held liable?
 
UK
A corporate can be held liable for bribery committed by an associated person. An associated person is defined in Section 8 of the Bribery Act 2010 as an employee, someone acting in the capacity of an employee, an agent or any other person who performs services for or on behalf of the organisation.

The Bribery Act covers all individuals and organisations with links to a corporate that could commit bribery on its behalf. Bribery committed by staff, agents, representatives in territories, subsidiaries, subcontractors, suppliers and anyone involved in joint ventures with the corporate can all lead to the corporate facing prosecution under the act.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
3.4
Can a company be held liable for bribery committed by management or other employees?
 
UK
Yes. An individual can be prosecuted under Section 1, 2 or 6 of the Bribery Act if he or she can be shown to be responsible for the offence. But if it can be shown that the directing mind and will of the company was responsible for the bribery, then the company can be prosecuted under Section 1, 2 or 6 – either along with or instead of individuals.

However, only a company can be prosecuted under Section 7. Under Section 7 of the act, a company can be prosecuted if a person associated with it bribes another person intending to obtain or retain business for that company or to obtain or retain an advantage in the conduct of business for the company.

A ‘person associated with a company’ is defined in Section 8 as a person who performs services for or on behalf of the company – which would certainly cover management and other employees. This also covers any agents working for the company or any of its subsidiaries.

Section 7 does not require a prosecution to have taken place arising from the offences committed by the associated person. However, there must be sufficient evidence to prove the commission of such an offence to the criminal standard.

The aim of Section 7 of the Bribery Act is to compel a change in corporate culture, which is why it is wide reaching and allows for a company to be prosecuted when senior employees engage in bribery.

While there is the defence to Section 7 of having adequate procedures in place, there are no legislative provisions or guideline cases to assist with determining what constitutes adequate policies and procedures. This will depend on the facts of each particular case.

The first contested case for failure to prevent bribery was the case of R v Skansen Interiors Ltd (2018). Skansen was a UK-based company that acquired two contracts in 2013, worth a total of £6 million. The managing director paid two bribes – the first £10,000 and the second £29,000 – to the project manager at the company that was inviting tenders for the work. Despite the bribery being committed by a senior employee unbeknown to the company and the fact that the bribes were uncovered by new management – who self-reported the bribery to the National Crime Agency – Skansen was still prosecuted. The Skansen managing director and the other company’s project manager were prosecuted under the general offence of Section 1 of the Bribery Act, while Skansen was prosecuted under Section 7 for failing to prevent bribery.

To successfully defend itself, Skansen needed to show that it had adequate polices in place, but the jury found this was not the case – hence the conviction. As there is no judicial guidance as to what will constitute adequate procedures, companies should take the right advice on what could be considered adequate procedures.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
3.5
Can a company be held liable for bribery committed by domestic or foreign subsidiaries?
 
UK
Yes. The extraterritorial reach of the Bribery Act means that while it covers bribery committed in the United Kingdom, it also covers any bribery committed anywhere in the world by a person or organisation with a close connection to the United Kingdom.

For companies, a ‘close connection’ to the United Kingdom means any organisation incorporated or formed in the United Kingdom or any organisation that carries out business or part of a business in the United Kingdom. If, therefore, such a company’s subsidiary commits bribery in the United Kingdom or in any other country, it can be prosecuted under the act.

Official guidance has stated that the issue of whether a company carries out a business or part of a business in the United Kingdom will be determined by a common-sense approach. This issue is to be determined on a case-by-case basis, according to the facts. The prosecution of a subsidiary does not require or necessarily lead to the prosecution of the parent company.

If a foreign subsidiary of a UK company commits an act of bribery on behalf of its UK parent company, it can lead to the parent company becoming liable under Section 7 of the Bribery Act –failure to prevent bribery. This would also be the case if the subsidiary were UK based.

There has yet to be a case that establishes whether a foreign parent company would be prosecuted if its UK subsidiary were found to have committed bribery.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
3.6
Post-merger or acquisition, can a successor company be held liable for bribery committed by legacy companies?
 
UK
Legislation and official guidance do not distinguish between commercial entities that have recently been taken over and their successors. Case law has shown that companies can be held liable for bribery committed by companies that they acquire. Companies should ensure that they undertake sufficient due diligence during the acquisition of any other organisation and have adequate procedures in place to prevent and detect bribery.

If there has been wrongdoing in Company A, one advantage of self-reporting and obtaining a DPA is that Company A can be reformed and recreated into the new, clean Company B. But Company B still has to pay the fine and demonstrate that this process is not a sham.

In May 2019 the SFO announced that Carol Ann Hodson, the former director and owner of a company named ALCA Fasteners Ltd, had pleaded guilty to paying £300,000 in bribes to secure contracts worth £12 million. The bribery was revealed by ALCA’s buyers, who identified it, reported it to the SFO and cooperated fully with the investigation. The SFO decided to prosecute Hodson rather than the company. This may be due to factors such as the offending not being recent, the current company being different from that which committed the bribery, the individual concerned having left the company and the self-reporting. Whatever the precise reason, the case sends a message that, when it comes to mergers and acquisitions, a company can self-report bribery it identifies in a company it has merged with or acquired and not necessarily be prosecuted.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors