The Bribery Act 2010 and US corporations
Many US corporations are now aware of the offences created by the UK Bribery Act 2010 and that the Act has international reach. However, with the Act now in force, many may still be left unsure whether the Act applies to them and what they will have to do to comply.
All US corporations that carry on a business or part of a business in the UK will be covered by the Act. An organisation does not have to be incorporated in the UK to be subject to the Act. US corporations that target UK customers, have employees, consultants or agents regularly working in the UK on their behalf or have a branch office in the UK are all likely to come under the jurisdiction of the Act.
US corporations that do not carry on any business in the UK may still be required to comply with the UK anti-bribery regime. Companies performing services on behalf of other organisations subject to the Act (including companies within its own corporate group) are likely to be asked to agree to comply with the provisions of the Act. This is because organisations subject to the Act will be responsible for offences committed by third parties acting on their behalf (regardless of where that third party is located). Further, directors of non-UK companies who are British citizens or ordinarily resident in the UK may be liable for the corrupt actions of employees of that non-UK company even if these actions were undertaken outside of the UK.
With regard to compliance the first thing that US corporations should be aware of is that there is no "one size fits all" approach to complying with the Bribery Act. The Ministry of Justice has produced guidance on the procedures that organisations can put in place to prevent bribery (the "Guidance") but this is not prescriptive. Instead the Guidance provides six principles which inform the procedures that an organisation should put in place. We focus briefly on three key themes below.
US corporations should be aware that in certain areas the Bribery Act goes further than the FCPA. It will not be sufficient simply to rely on FCPA procedures and policies.
Risk Assessment
The process of putting in place procedures to prevent bribery must be informed by a well documented risk assessment. This assessment must be overseen by top level management and be appropriately resourced. Risk assessments should be carried out periodically and must also be repeated when the organisation's risk levels change, for example when an organisation enters a new market or completes a new acquisition.
The organisation must consider external risks such as the countries and sectors in which it operates, as well as internal risks such as levels of staff training and clear financial controls. Taylor Wessing is currently assisting a number of US corporations with their risk assessments. We can provide guidance notes and advice on issues such as the risks involved in offering certain forms of hospitality and the extent to which members of the group organisational structure not domiciled in the UK will be subject to the Act.
Training
The Guidance makes clear that there must be a top-level commitment to the prevention of bribery within an organisation. This requires senior management to take responsibility for communicating an organisation's anti-bribery stance and to have the appropriate degree of involvement in developing bribery prevention procedures. It is essential that senior management of an organisation are aware of the bribery risks within their organisation and are able to input on anti-bribery policies. For this reason Taylor Wessing is providing bespoke training sessions for the board members of many multinational organisations. Such sessions are tailored to the risks that organisation faces and the adequacy of its current ethical policies.
Principle 5 of the Guidance contains a requirement to ensure that anti-bribery policies are clearly communicated throughout an organisation. This includes the provision of training to employees and associated persons. Taylor Wessing designs and delivers staff training for organisations seeking to comply with the Bribery Act.
Policies
The Guidance refers throughout to the importance of putting in place anti-bribery policies that have been clearly communicated to all relevant persons. Policies must mitigate identified bribery risks and prevent deliberate unethical conduct. An organisation’s policies must not only cover its employees but also all third parties who perform services for or on behalf of the organisation. Taylor Wessing is assisting a wide range of US corporations with the drafting and implementation of their anti-bribery policies. The types of requests Taylor Wessing regularly receives are:
- drafting a full ethical policy covering all entities within an international group structure;
- reviewing current policies (including FCPA compliant policies) and making any necessary amendments;
- drafting specific policies to deal with identified bribery risks (i.e. corporate hospitality);
- reviewing employment contracts to ensure they expressly prohibit bribery and communicate company policy on bribery and
- reviewing agreements with agents and service suppliers to ensure they comply with the Bribery Act and communicate organisational policy on bribery.
Each organisation must take a tailored approach to compliance with the Bribery Act based on the specific risk areas it identifies. Some US corporations covered by the Act will find that they do not need to do much in practice in order to comply with the Act, while for others compliance will require significant input. Should you require guidance and assistance with the implementation of your organisation’s Bribery Act compliance regime or would like further information on any of the above please contact a member of our team.
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Lawyers Mark Barron, Paul Callaghan, David de Ferrars, Christopher Jeffery, David Kent
