Global menu

Our global pages

Close

The impact the UKBA has had on transatlantic law enforcement and business

  • Northern Ireland

    05-07-2021

    1 July 2021 marked ten years since the enactment of the UK Bribery Act 2010 (the “UKBA”), the provisions of which extend to Northern Ireland. Prior to the enactment of the UKBA, the UK’s ability to fight bribery was hindered by outdated anti-bribery laws and there was a need for reform. However, the introduction of the UKBA was a major turning point, as it became jointly with the USA’s Foreign Corrupt Practices Act (“FCPA”) the toughest bribery laws globally. The UKBA has since been branded “an exemplary piece of legislation” by the House of Lords Select Committee in 2019. Our briefing on this report can be found here for more information.

    In this article we look at what impact the introduction of the UKBA has had in the US and on transatlantic business.

    The UKBA basics

    The UKBA made it an offence to give bribes, receive bribes, bribe a foreign public official, and also introduced the new corporate offence of failing to prevent bribery. It has wide territorial reach and can be enforced against the following “persons”, despite where they are in the world at the time in which an offence was committed: companies incorporated in the UK (including UK partnerships), citizens of the UK or British Overseas territories; and to individuals (including foreign nationals) resident in the UK. It even goes as far as applying to foreign corporate bodies with a business or part of a business in the UK, and to any national or entity carrying out bribery in the UK. Senior officers of a corporate body are also held accountable under the UKBA in certain circumstances. 

    The FCPA basics

    The FCPA was introduced in 1977 and as a result US law enforcement of the FCPA is more mature than in the UK. Whilst it is argued that the UKBA is more far-reaching in its extra-territorial scope, the FCPA also does not shy away from this. In addition to applying to US nationals and entities, the FCPA applies to foreign nationals and entities acting in the US, as well as to entities with a US contact that is used for corrupt purposes. Further, there is potential for a foreign entity or a national to be held liable for “aiding and abetting” an FCPA violation or for “conspiring” with others to violate the same, even if the foreign entity or national did not take any act in furtherance of the corrupt payment whilst in the territory of the US.  In addition, the FCPA applies to issuers of securities registered in the US, as well as US other issuers that are required to report to the Securities and Exchange Commission (the “SEC”). 

    Key differences between the UKBA and FCPA

    1. Focus only on the bribe payer in the FCPA

    A key difference is that the FCPA makes it an offence to make corrupt payments to foreign officials but only focuses the offence on the person making the bribe as opposed to the person receiving it, whereas the UKBA on the other hand, focuses on both the bribe payer and recipient.

    However, there has been a push in the US to pass legislation to address soliciting or receiving bribes in the Countering Russian and Other Overseas Kleptocracy (CROOK) Act, but which has not yet been voted on by the US Congress. For enforcement actions in which the total criminal penalties exceed $50,000,000, the CROOK Act would require an additional prevention payment of $5,000,000 to be deposited into a newly-created Anti-Corruption Fund, which would be used to assist anti-corruption initiatives overseas.

    There has also been a noticeable trend in the US Department of Justice (“DOJ”) charging money laundering offences against those who receive bribes.

    2. Focus on Foreign Public Officials in the FCPA

    The FCPA does not prohibit private, business-to-business bribery or bribery of domestic public officials unlike the UKBA which prohibits both public and private sector bribery. However, both bribery of US domestic public officials and private bribery are covered by other US state and federal anti-corruption legislation.

    3. Focus on the bribe payer’s intention in the FCPA

    Knowledge is an important and complex factor in the FCPA legislation as payments need to be made with intent under certain circumstances according to which provision (i.e. the anti-bribery or accounting provision) is being enforced and whether the liability is civil or criminal. The UKBA, however, does not focus on this to such a great extent and only the general offences of giving and receiving bribes require intention whereas the corporate offence does not.

    4. Facilitation payments exceptions in the FCPA

    The UKBA does not contain an exemption for making or receiving facilitation payments and the facilitation payments are classed as bribes under the UKBA. However, facilitation payments are not prohibited under the FCPA and are classed as an “exception”.

    5. Penalties

    The penalties for non-compliance with the UKBA emphasised the UK’s commitment to fighting bribery. There is a maximum penalty of ten years’ imprisonment, an unlimited fine, or both for individuals found guilty of committing any of the offences under the UKBA and companies could also be subject to unlimited fines. The FCPA’s penalties are not capped and will be issued depending on the violation.

    Under the FCPA, individual offenders face imprisonment of up to five years and fines of up to USD 250,000 per violation. Companies on the other hand can face fines of up to USD 2 million per violation. The penalties are stricter for accounting violations where 20 years imprisonment can be enforced against individuals with fines of up to USD 5 million per violation and companies facing fines as high as USD 25 million per violation. 

    Impact of the UKBA in the US

    Whilst the introduction of the UKBA did not cause any amendments to the FCPA, the DOJ in 2020 published an amended version of the 2012 Resource Guide to the FCPA, which further addressed the use of anti-bribery compliance programmes.

    The importance of anti-bribery compliance programmes has significantly increased as a result of the statutory defence contained within the UKBA to the offence of failure to prevent bribery, where a company being can demonstrate that it had ‘adequate procedures’ (an anti-bribery compliance programme) in place at the relevant time. Although it is not a formal defence under the FCPA, the effectiveness of a corporation’s compliance programs is often an important topic during settlement negotiations.

    However, it is generally understood that the amendments to the guide were made in response to requests for additional clarity from companies and counsel rather than due to the direct influence of the UKBA. 

    Transatlantic law enforcement trends

    Both the US and UK authorities have over the past decade demonstrated continuous increased commitment to investigate and prosecute violations of anti-bribery laws. In the US the DOJ and SEC have been imposing higher penalties each year and setting new records for settlements, such as the USD$ 1 billion which Ericsson agreed to pay to the SEC and DOJ in June 2019 following a US enforcement action for alleged FCPA violations. 

    Since the introduction of the UKBA, the UK’s Serious Fraud Office (“SFO”) has concluded seven enforcement actions against companies under the UKBA which have resulted in financial penalties totalling over GBP £1.3 billion. Two of the largest of these enforcement cases were conducted jointly with the US authorities.

    Until the introduction of the UKBA in the UK criminal proceedings against companies were rare, except for in regard to environmental, and health and safety offences, unlike in the US. Almost three years after the introduction of the UKBA corporate offence of failure to prevent bribery, the UK government introduced the US concept of ‘Deferred Prosecution Agreements’ (“DPAs”). A DPA is an agreement reached between a prosecutor and company under criminal investigation in which the company agrees to comply with a number of terms, such as paying a financial penalty, paying compensation and co-operating with future prosecutions of individuals, and in return the prosecutor agrees to suspend the prosecution for a defined period, usually three years. In the UK the DPA must be approved by a Judge.

    DPAs were introduced in the UK as a way of avoiding lengthy and costly trials and allowing a wrong-doing company to make full reparation whilst avoiding a criminal conviction. Since DPAs were introduced in early 2014, the SFO have settled nine DPAs, six of which were for offences under the UKBA.

    In the US, prosecutors can also use Non-Prosecution Agreements (“NPAs”), but NPAs are unlikely to ever be introduced in the UK since the House of Lords determined in 2019 that they would not add value to the UK’s criminal justice systems.

    The impact on transatlantic business

    With the possibility of unlimited fines and the extra-territorial reach of the legislation in both the UK and US, non-compliance with anti-bribery regulations has become a more serious issue for companies.

    Companies who fall within the wide jurisdictional reach of the FCPA and UKBA should ensure effective compliance programmes are in place which take into account the Six Principles and 10 Hallmarks of effective anti-bribery compliance programmes as set out in the guidance published by the UK’s Ministry of Justice and the US DOJ Criminal Division respectively.

    If you would like to know more about effective anti-bribery and corruption compliance programmes designed to address the UKBA and FCPA, the specialists in our Global Corporate Crime & Investigations team would be happy to help you.

    Our Global anti-bribery and corruption guide also provides a snapshot of the key elements of the anti-bribery legislation in various countries across the globe.

    For more information, please contact

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

    < Go back