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U.K. Bribery Act Even Broader in Scope than U.S. FCPA

Posted on September 7th, 2011 | Author: Ted Margolis

On July 1, 2011 the new United Kingdom Bribery Act came into force. Because of the wide jurisdictional reach of that Act, any company or person(s) with any substantive contacts with the U.K. should understand how the Act may affect your business.

The Act revises the bribery laws in the U.K., now making it a crime for a person to offer, give or promise to give a “financial or other advantage” to another individual in exchange for “improperly” performing a “relevant function or activity.”

This means that making gifts to or even entertaining persons who can affect your company in obtaining a contract or a business advantage, where the purpose of the gift or entertainment is to obtain a quid pro quo, may violate this criminal act.

To fall within the jurisdiction of the U.K. Bribery Act a person or company must have either committed the crime inside the United Kingdom or acted outside the country in a way which would have constituted a crime had it happened in the UK. The offending person must have a “close connection” to the U.K. Therefore, if you sell into the U.K., have a branch company or an agent or have close business ties with U.K. companies or individuals you may be subject to the Act.

If you have a connection with U.K. and do something to violate the Act in a totally different country you may still face prosecution in the U.K. The jurisdictional reach of the Act is substantial.

The Act is really a broader extension of the U.S. Foreign Corrupt Practices Act (FCPA). The U.K. version is, however, much broader in scope and therefore FCPA practices may not be sufficient for protection against violation of this new Act.

Companies with U.K. contacts should carefully review their policies and procedures for doing business to make sure that they make every effort not to trigger what could be a very painful violation.