Answer ... As the foreword to the Bribery Act 2010 Guidance issued by the Ministry of Justice (MOJ) recognises, combating bribery involves both common sense and proportionality. The guidance adds: “Rest assured – no one wants to stop firms getting to know their clients by taking them to events like Wimbledon or the Grand Prix.” The guidance further recognises that bona fide hospitality and promotional or other business expenditure seeking to improve a company’s image, better present its products and services, or establish cordial relations is an “established and important part of doing business”.

However, gifts, hospitality and expenses are recognised as vehicles through which bribes can be made. The context in which the gifts, hospitality or expenses are offered or received, and their nature, are important in determining whether they are in fact bribes or bona fide expenditure. The more lavish or expensive they are (particularly when compared to the standards or norms of the relevant sector), the stronger the inference will be that they are bribes. For example, offering a five-star, all-expenses paid holiday – particularly to a location unconnected with the offeror’s business operations – to a key decision maker for the award of contracts would raise a strong inference of bribery. To quote the House of Lords Select Committee on the Bribery Act, it is about drawing “the line between legitimately oiling the wheels of commerce and attempting to gain an unfair business advantage”.

Answer ... Facilitation payments, or unofficial payments made to public officials in order to secure or expedite the performance of a routine or necessary action, can trigger any of the Bribery Act offences. As the Joint Prosecution Guidance of the Director of the SFO and the DPP makes clear, they are illegal under both the pre-Bribery Act offences and the Bribery Act. Facilitation payments are seen as a pernicious form of bribery, as what can seem like small one-off payments not only can lead over time to large amounts in fact being paid over as bribes, but further leave those individuals and/or organisations susceptible to pressure to pay larger bribes.

The MOJ guidance expressly recognises that there are circumstances where there may be no alternative other than to make payments where a defence of duress may be engaged – for example, where the payments are made in order to protect against the loss of life, limb or liberty. The Joint Prosecution Guidance also lists factors to be taken into consideration by prosecutors when deciding whether to prosecute, with the following having particular relevance to facilitation payments:

• Factors tending in favour of prosecution:
• • large or repeated payments, which are more likely to attract a significant sentence;
  • facilitation payments which are planned or accepted as a standard way of conducting business, which indicate that the offence was premeditated;
  • payments which indicate an element of active corruption of the official in the way that the offence was committed; and
  • an individual’s failure to correctly follow a company’s clear and appropriate policy setting out the procedures to be followed if facilitation payments are requested.
• Factors tending against prosecution:
• • a single, small payment, which is likely to result in only a nominal penalty;
  • payment/s that come to light as a result of a genuinely proactive approach involving self-reporting and remedial action;
  • where a company has a clear and appropriate policy setting out procedures to be followed if facilitation payments are requested and these have been followed; and
  • where the payer was in a vulnerable position arising from the circumstances in which the payment was demanded.

Answer ... Bribery through intermediaries and other third parties attracts criminal liability; the offences under Sections 1, 2 and 6 of the Bribery Act recognise that bribes can be offered or received both directly and indirectly. If the bribery in question takes place in the United Kingdom, those third parties or intermediaries can be prosecuted for offences under Section 1, 2 or 6. However, as set out in question 2.8, where the offence takes place outside of the United Kingdom, third parties or intermediaries can be prosecuted under Section 1, 2 or 6 only if they have a close connection to the United Kingdom.

The failure to prevent offence makes it plain that a company can be held liable for bribery committed by an associated person. An ‘associated person’ is defined as a person who performs services for or on behalf of the company, and thus may be a company employee, agent or subsidiary.

Answer ... As mentioned in question 2.6, a company can be prosecuted under Section 1, 2 or 6 of the Bribery Act, although this will require the prosecution to prove that a person representing the directing mind and will of the company committed the offence in order to attribute criminal liability to the company. Bribery committed by ‘management’ may thus lead to criminal liability for the company, as ‘management’ implies someone or a group of people sufficiently senior within the company to represent its directing mind and will. It is unlikely that ordinary employees will be sufficient to represent the directing mind and will of a company; but much will depend on the form and nature of the company (e.g., the seniority of the relevant employees and its size and structure).

However, the offence of failure to prevent was introduced to avoid this specific issue: management and employees both fit the definition of an ‘associated person’ (see question 3.3), and offences they commit will thus lead to liability for the company. As at the date of writing, there have been only five prosecutions for this offence. One of those was in the 2018 case of R v Skansen Interiors Ltd, the only contested trial for the offence to date. Skansen was convicted on the basis of its former managing director (a senior employee) having paid bribes to the project manager of a company in order to secure refurbishment contracts worth £6 million.

In April 2022, three companies – Boulting Group Ltd (now trading as WABGS), Tritec Systems Ltd and Electron Systems Ltd – were sentenced after their guilty pleas to the failure to prevent offence, having paid approximately £1.5 million in total as bribes to a former manager at a UK company in return for contracts and confidential information between 2004 and 2013. Boulting Group was said to have benefited by £13 million from the contracts it obtained. More recently, in June 2022, Glencore Energy (UK) Ltd pleaded guilty to (amongst other offences) two offences of failure to prevent bribery in Equatorial Guinea and South Sudan.

Answer ... Yes. Section 12 of the Bribery Act states that the failure to prevent offence can be committed irrespective of whether the bribery takes place in the United Kingdom or elsewhere. As set out in question 2.7, companies incorporated or formed outside the United Kingdom are caught by the Bribery Act, provided that they carry on a business, or part of a business, in any part of the United Kingdom. As to whether a business or part of a business is carried on in any part of the United Kingdom, the MOJ guidance indicates that this will be determined by a common-sense approach, with any dispute to be determined by the courts. The MOJ guidance states that the mere fact that a company’s securities have been admitted to trading on the London Stock Exchange will not itself lead to that company qualifying as a company carrying on a business, or part of a business, in the United Kingdom. Importantly, it adds that having a UK subsidiary will “not, in itself, mean that a parent company is carrying on a business in the UK, since a subsidiary may act independently of its parent or other group companies”.

In the 2015 case of R v Sweett Group plc, the UK parent company pleaded guilty to the failure to prevent offence, as it failed to prevent its Cypriot subsidiary from paying bribes to a senior official at a company in the United Arab Emirates in order to secure a contract worth £63 million relating to the building of a hotel in Abu Dhabi. As another practical example, in 2021 Petrofac Ltd, a Jersey-registered company with a corporate service office in London, pleaded guilty to seven failure to prevent offences, by virtue of which it failed to prevent various senior executives from its multiple subsidiaries paying £32 million in bribes to agents with a view to influencing the award of contracts in Iraq, Saudi Arabia and the United Arab Emirates.

Answer ... Yes. There is nothing in law which prohibits a successor company being held liable for criminal offences committed by the company when under previous ownership or management. However, Paragraph 2.8.2(v) of the Deferred Prosecution Agreements Code of Practice includes an instance where the offence is not recent and the corporate entity has been taken over by another organisation as one of the public interest factors in favour of a DPA rather than prosecution. While DPAs are explained further in questions 5.1 and 5.4, this does not extinguish liability; but it does mean that prosecution may, in certain circumstances, be avoided.

An example of this is the 2021 DPA between the SFO and Amec Foster Wheeler Energy Ltd (AFWEL). In this case, the corporate was charged with offences of conspiracy to make corrupt payments under the pre-Bribery Act legislation and one offence of failure to prevent, with the offending relating to AFWEL’s use of corrupt agents in Nigeria, Saudi Arabia, Malaysia, India and Brazil between 1996 and 2014. The company, however, had been acquired twice since the index offending, with the most recent acquisition by John Wood Group plc (described in the judgment as an innocent party) taking place three months after the announcement of the SFO’s investigation. Given that John Wood Group was twice removed from the management in place at the time of the offending and was thus an entirely innocent party, the court found that it was entitled to a standalone ‘twice removed’ discount when considering the financial penalty element of the DPA.