The Act creates the following offences:

• general offences to bribe another and receive bribes;
• specific offence to bribe foreign public official; and
• offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf

The Act has a specific extra-territorial application.

It applies to bribery taking place anywhere in the world, if committed by individuals and companies with a “close connection” with the UK. As such, this probably applies not only to British nationals and the UK companies, but also to those foreign nationals with residence and/or companies carrying on business in the UK.

The Act also creates a criminal offence when a commercial organisation fails to prevent bribery being carried out by its employees or agents or other third parties performing services for or on its behalf (which might, for example, include joint-venture partners).

This is in effect a strict liability offence, which means that proof of knowledge on the part of management is not required. A commercial organization could therefore be held liable if it benefited from and had failed to establish “adequate procedures” to prevent this happening. The only defence would be that “adequate procedures” were in place to prevent such bribery.

We now await the Secretary of State publishing guidance procedures, which commercial organisations can then put in place, to demonstrate compliance with the Act.

Whilst similar to the US Foreign Corrupt Practices Act (FCPA), the Act goes beyond the standards set by the FCPA. Unlike the FCPA, there is no defence for “facilitation payments” in the Act. The Act also extends to prohibit receiving a bribe. In addition to bribery involving public officials, the Act also covers bribery in private individuals. Therefore, compliance with the FCPA alone may not guarantee compliance with the Act.

The Act will have far reaching implications for the way people doing business in the UK. Companies having operations or conducting business in the UK are strongly advised to put in place internal compliance programmes to ensure that they can and so rely on the “adequate procedures” defence.

In the meantime, companies should consider:

• adopting anti-bribery rules and ensuring all employees who deal with third parties or foreign public officials are sufficiently trained to understand the anti-bribery rules;
• setting out clear policy on accepting and giving gifts;
• setting up “whistleblowing” procedures to enable employees to report bribery; and
• reviewing existing contracts dealing with third parties in countries that are ranked as high risk for corruption to ensure that they demonstrate compliance with the Act.

Hong Kong companies and individuals are already bound by the provisions of the Prevention of Corruption Ordinance (Cap 201) of Hong Kong.

However, Hong Kong companies doing business in the UK should also be aware that they will probably be bound by the anti-bribery rules of the Act and therefore, should put in place the required internal compliance programmes as mentioned above.

OLN’s Corporate and Commercial Practice Group regularly advises on business planning and good practice guidelines for regulatory compliance. We are happy to give you further advice and/or required strategic overview on the above topic as required.

This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.