Bribery Act 2010
Encyclopedia
The Bribery Act 2010 is an Act
of the Parliament of the United Kingdom
that covers the criminal law relating to bribery. Introduced to Parliament in the Queen's Speech in 2009 after several decades of reports and draft bills, the Act received the Royal Assent
on 8 April 2010 following cross-party support. Initially scheduled to enter into force in April 2010, this was changed to 1 July 2011. The Act repeals all previous statutory and common law provisions in relation to bribery, instead replacing them with the crimes of bribery, being bribed, the bribery of foreign public officials, and the failure of a commercial organisation to prevent bribery on its behalf.
The penalties for committing a crime under the Act are a maximum of 10 years' imprisonment, along with an unlimited fine, and the potential for the confiscation of property under the Proceeds of Crime Act 2002
, as well as the disqualification of directors under the Company Directors Disqualification Act 1986
. The Act has a near-universal jurisdiction, allowing for the prosecution of an individual or company with links to the United Kingdom, regardless of where the crime occurred. Described as "the toughest anti-corruption legislation in the world", concerns have been raised that the Act's provisions criminalise behaviour that is acceptable in the global market, and puts British business at a competitive disadvantage.
, the Prevention of Corruption Act 1906
and the Prevention of Corruption Act 1916, a body of law described as "inconsistent, anachronistic and inadequate". Following the Poulson affair in 1972, the Salmon Committee on Standards in Public Life recommended updating and codifying these statutes, but the government of the time took no action. Similar suggestions were brought up in the first report of the Committee on Standards in Public Life
established by John Major
in 1994, and the Home Office
published a draft consultation paper in 1997, discussing extending anti-bribery and anti-corruption law. This was followed by the Law Commission
's report Legislating the Criminal Code: Corruption in 1998. The consultation paper and report coincided with mounting criticism from the Organisation for Economic Co-operation and Development
, who felt that, despite the United Kingdom's ratification of the OECD Anti-Bribery Convention
, its bribery laws were inadequate.
A draft Bribery Bill was announced in the 2002 Queen's Speech, but was rejected by the joint committee
examining it. A second consultation paper was issued in 2005 examining the committee's concerns, before the government announced in March that "there was broad support for reform of the current law, but there was no consensus as to how this could be achieved". Following a white paper
in March 2009, the Bribery Bill, based on the Law Commission's 2008 report Reforming Bribery, was announced in the Queen's Speech. Initially given all-party support after its introduction by Jack Straw
in 2009, the Bill was, according to The Guardian
, subject to an attempted filibuster
by Members of Parliament from the Conservative Party
. This followed pressure from the Confederation of British Industry
, who worried that the Bill in its original form would hamper the competitiveness of British industry.
The Bill was given Royal Assent
on 8 April 2010, becoming the Bribery Act 2010, and was expected to come into force immediately. The government instead chose to hold several rounds of public consultations before announcing that it would come into force in April 2011. As of February 2011, Ken Clarke, the Secretary of State for Justice, has yet to publish guidance on the interpretation and use of the Act, and has announced that it will not come into force until at least three months after such guidance is made available. The Ministry of Justice published the guidance on 28 March 2011.
, "could potentially encompass items such as contracts, non-monetary gifts and offers of employment". The "relevant function or activity" element is explained in Section 3—it covers "any function of a public nature; any activity connected with a business, trade or profession; any activity performed in the course of a person's employment; or any activity performed by or on behalf of a body of persons whether corporate or unincorporated". This applies to both private and public industry, and encompasses activities performed outside the UK, even activities with no link to the country. The conditions attached are that the person performing the function could be expected to be performing it in good faith or with impartiality, or that an element of trust attaches to that person's role.
Under Section 4, the activity will be considered to be "improperly" performed when the expectation of good faith or impartiality has been breached, or when the function has been performed in a way not expected of a person in a position of trust. Section 5 provides that the standard in deciding what would be expected is what a reasonable person in the UK might expect of a person in such a position. Where the breach has occurred in a jurisdiction outside the UK, local practises or customs should be disregarded when deciding this, unless they form part of the "written law" of the jurisdiction; "written law" is given to mean any constitution, statute or judicial opinion set down in writing. The general offences also cover situations where the mere acceptance of such an advantage would constitute improperly performing relevant functions or activities.
, this does not only apply to the organisation itself; individuals and employees may also be guilty. The offence is one of strict liability
, with no need to prove any kind of intention or positive action. It is also one of vicarious liability
; a commercial organisation can be guilty of the offence if the bribery is carried out by an employee, an agent, a subsidiary, or another third-party, as found in Section 8. The location of the third-party is irrelevant to the prosecution— according to David Aaronberg and Nichola Higgins in the Archbold Review, "therefore, a German business with retail outlets in the UK which pays a bribe in Spain could, in theory at least, face prosecution in the UK". Under Section 7(2), the commercial organisation has a defence if it can show that, while bribery did take place, the commercial organisation had in place "adequate procedures designed to prevent persons associated with [the organisation] from undertaking such conduct". Under the Act's explanatory notes, the burden of proof in this situation is on the organisation, with the burden of proof being "on the balance of probabilities".
. Section 11 explains the penalties for individuals and companies found guilty of committing a crime. If an individual is found guilty of a bribery offence, tried as a summary offence
, they may be imprisoned for up to 12 months and fined up to £5,000. Someone found guilty on indictment
, however, faces up to 10 years' imprisonment and an unlimited fine. The crime of a commercial organisation failing to prevent bribery is punishable by an unlimited fine. In addition, a convicted individual or organisation may be subject to a confiscation order under the Proceeds of Crime Act 2002
, while a company director who is convicted may be disqualified under the Company Directors Disqualification Act 1986
.
Under Section 16, the Act applies to servants of the crown
, while Section 17 repeals all previous common law and statutory offences relating to bribery, replacing them with provisions of the Act. Section 18 provides that the Act applies to England and Wales, Scotland and Northern Ireland; while the separate consent of the Scottish Parliament
is usually required in such cases, as is made clear in Section 19, a Legislative Consent Motion was passed on 11 February 2010, allowing for the application of the Act within Scotland.
. Despite being "widely drafted and far-reaching in scope [and] in many ways an improvement on earlier corruption legislation", significant concerns have been raised, mainly around the fact that the Act may harm British industry's competitiveness in the global market. David Aaronberg and Nichola Higgins, writing in the Archbold Review, argue that section 6 particularly has the potential to include actions which are ethically problematic but seen as legally permissible. Aisha Anwar and Gavin Deeprose in the Scots Law Times
take a similar line, highlighting as particularly problematic areas corporate hospitality and facilitation payments, described as "essentially a form of extortion on the payer and, although not a common feature in the UK, they are commonplace in many international jurisdictions", which may fall under the scope of the Act despite being permissible in the commercial world.
Acts of Parliament in the United Kingdom
An Act of Parliament in the United Kingdom is a type of legislation called primary legislation. These Acts are passed by the Parliament of the United Kingdom at Westminster, or by the Scottish Parliament at Edinburgh....
of the Parliament of the United Kingdom
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...
that covers the criminal law relating to bribery. Introduced to Parliament in the Queen's Speech in 2009 after several decades of reports and draft bills, the Act received the Royal Assent
Royal Assent
The granting of royal assent refers to the method by which any constitutional monarch formally approves and promulgates an act of his or her nation's parliament, thus making it a law...
on 8 April 2010 following cross-party support. Initially scheduled to enter into force in April 2010, this was changed to 1 July 2011. The Act repeals all previous statutory and common law provisions in relation to bribery, instead replacing them with the crimes of bribery, being bribed, the bribery of foreign public officials, and the failure of a commercial organisation to prevent bribery on its behalf.
The penalties for committing a crime under the Act are a maximum of 10 years' imprisonment, along with an unlimited fine, and the potential for the confiscation of property under the Proceeds of Crime Act 2002
Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 is an Act of the Parliament of the United Kingdom which provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money laundering legislation in the UK.-Background:...
, as well as the disqualification of directors under the Company Directors Disqualification Act 1986
Company Directors Disqualification Act 1986
Company Directors Disqualification Act 1986 is a piece of UK company law, which sets out the procedures for company directors to be disqualified in certain cases of misconduct.-History:...
. The Act has a near-universal jurisdiction, allowing for the prosecution of an individual or company with links to the United Kingdom, regardless of where the crime occurred. Described as "the toughest anti-corruption legislation in the world", concerns have been raised that the Act's provisions criminalise behaviour that is acceptable in the global market, and puts British business at a competitive disadvantage.
Background
Prior to the Act, British anti-bribery law was based on the Public Bodies Corrupt Practices Act 1889Public Bodies Corrupt Practices Act 1889
The Public Bodies Corrupt Practices Act 1889 was an Act of the Parliament of the United Kingdom of Great Britain and Ireland...
, the Prevention of Corruption Act 1906
Prevention of Corruption Act 1906
The Prevention of Corruption Act 1906 was an Act of the Parliament of the United Kingdom of Great Britain and Ireland...
and the Prevention of Corruption Act 1916, a body of law described as "inconsistent, anachronistic and inadequate". Following the Poulson affair in 1972, the Salmon Committee on Standards in Public Life recommended updating and codifying these statutes, but the government of the time took no action. Similar suggestions were brought up in the first report of the Committee on Standards in Public Life
Committee on Standards in Public Life
The Committee on Standards in Public Life is an advisory non-departmental public body of the United Kingdom Government.The Committee on Standards in Public Life is constituted as a standing body with its members appointed for up to three years.-History:...
established by John Major
John Major
Sir John Major, is a British Conservative politician, who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 1990–1997...
in 1994, and the Home Office
Home Office
The Home Office is the United Kingdom government department responsible for immigration control, security, and order. As such it is responsible for the police, UK Border Agency, and the Security Service . It is also in charge of government policy on security-related issues such as drugs,...
published a draft consultation paper in 1997, discussing extending anti-bribery and anti-corruption law. This was followed by the Law Commission
Law Commission (England and Wales)
In England and Wales the Law Commission is an independent body set up by Parliament by the Law Commissions Act 1965 in 1965 to keep the law of England and Wales under review and to recommend reforms. The organisation is headed by a Chairman and four Law Commissioners...
's report Legislating the Criminal Code: Corruption in 1998. The consultation paper and report coincided with mounting criticism from the Organisation for Economic Co-operation and Development
Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
, who felt that, despite the United Kingdom's ratification of the OECD Anti-Bribery Convention
OECD Anti-Bribery Convention
The OECD Anti-Bribery Convention is a convention of the OECD aimed at reducing corruption in developing countries by encouraging sanctions against bribery in international business transactions carried out by companies based in the Convention member countries...
, its bribery laws were inadequate.
A draft Bribery Bill was announced in the 2002 Queen's Speech, but was rejected by the joint committee
Joint committee
A Joint Committee is a term in politics that is used to refer to a committee made up of members of both chambers of a bicameral legislature. In other contexts, it refers to a committee with members from more than one organization.-Republic of Ireland:...
examining it. A second consultation paper was issued in 2005 examining the committee's concerns, before the government announced in March that "there was broad support for reform of the current law, but there was no consensus as to how this could be achieved". Following a white paper
White paper
A white paper is an authoritative report or guide that helps solve a problem. White papers are used to educate readers and help people make decisions, and are often requested and used in politics, policy, business, and technical fields. In commercial use, the term has also come to refer to...
in March 2009, the Bribery Bill, based on the Law Commission's 2008 report Reforming Bribery, was announced in the Queen's Speech. Initially given all-party support after its introduction by Jack Straw
Jack Straw
Jack Straw , British politician.Jack Straw may also refer to:* Jack Straw , English* "Jack Straw" , 1971 song by the Grateful Dead* Jack Straw by W...
in 2009, the Bill was, according to The Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
, subject to an attempted filibuster
Filibuster
A filibuster is a type of parliamentary procedure. Specifically, it is the right of an individual to extend debate, allowing a lone member to delay or entirely prevent a vote on a given proposal...
by Members of Parliament from the Conservative Party
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
. This followed pressure from the Confederation of British Industry
Confederation of British Industry
The Confederation of British Industry is a British not for profit organisation incorporated by Royal charter which promotes the interests of its members, some 200,000 British businesses, a figure which includes some 80% of FTSE 100 companies and around 50% of FTSE 350 companies.-Role:The CBI works...
, who worried that the Bill in its original form would hamper the competitiveness of British industry.
The Bill was given Royal Assent
Royal Assent
The granting of royal assent refers to the method by which any constitutional monarch formally approves and promulgates an act of his or her nation's parliament, thus making it a law...
on 8 April 2010, becoming the Bribery Act 2010, and was expected to come into force immediately. The government instead chose to hold several rounds of public consultations before announcing that it would come into force in April 2011. As of February 2011, Ken Clarke, the Secretary of State for Justice, has yet to publish guidance on the interpretation and use of the Act, and has announced that it will not come into force until at least three months after such guidance is made available. The Ministry of Justice published the guidance on 28 March 2011.
General bribery offences
Sections 1 to 5 of the Act cover "general bribery offences". The crime of bribery is described in Section 1 as occurring when a person offers, gives or promises to give a "financial or other advantage" to another individual in exchange for "improperly" performing a "relevant function or activity". Section 2 covers the offence of being bribed, which is defined as requesting, accepting or agreeing to accept such an advantage, in exchange for improperly performing such a function or activity. "Financial or other advantage" is not defined in the Act, but, according to Aisha Anwar and Gavin Deeprose in the Scots Law TimesScots Law Times
The Scots Law Times is the law reports service in Scotland, publishing over 1400 pages of reports each year. Published weekly during court term, the Scots Law Times covers every Scottish court, civil and criminal, from the Sheriff Courts to the House of Lords.Since 2000, the Scots Law Times...
, "could potentially encompass items such as contracts, non-monetary gifts and offers of employment". The "relevant function or activity" element is explained in Section 3—it covers "any function of a public nature; any activity connected with a business, trade or profession; any activity performed in the course of a person's employment; or any activity performed by or on behalf of a body of persons whether corporate or unincorporated". This applies to both private and public industry, and encompasses activities performed outside the UK, even activities with no link to the country. The conditions attached are that the person performing the function could be expected to be performing it in good faith or with impartiality, or that an element of trust attaches to that person's role.
Under Section 4, the activity will be considered to be "improperly" performed when the expectation of good faith or impartiality has been breached, or when the function has been performed in a way not expected of a person in a position of trust. Section 5 provides that the standard in deciding what would be expected is what a reasonable person in the UK might expect of a person in such a position. Where the breach has occurred in a jurisdiction outside the UK, local practises or customs should be disregarded when deciding this, unless they form part of the "written law" of the jurisdiction; "written law" is given to mean any constitution, statute or judicial opinion set down in writing. The general offences also cover situations where the mere acceptance of such an advantage would constitute improperly performing relevant functions or activities.
Bribery of foreign public officials
Bribery of foreign public officials is a distinct crime under Section 6, in line with the OECD Anti-Bribery Convention. A person will be guilty of this offence if they promise, offer or give a financial or other advantage to a foreign public official, either directly or through a third party, where such an advantage is not legitimately due. A foreign public official is defined, under Section 6(4), as " an individual holding legislative, administrative or judicial posts or anyone carrying out a public function for a foreign country or the country's public agencies or an official or agent of a public international organisation". The inclusion of "through a third party" is intended to prevent the use of go-betweens to avoid committing a crime, although if the written law of the country of the foreign public official allows or requires the official to accept the advantage offered, no crime will be committed. Unlike with general bribery offences, there is no requirement to show that the public official acted improperly as a result; this is a distinction between the Act and the Anti-Bribery Convention. The offence under Section 6 only applies to the briber, and not to the official who receives or agrees to receive such a bribe.Failure of commercial organisations to prevent bribery
Section 7 creates the "broad and innovatory offence" of the failure of commercial organisations to prevent bribery on their behalf. This applies to all commercial organisations which have business in the UK. Unlike corporate manslaughterCorporate manslaughter
Corporate manslaughter is a criminal offence in English law, being an act of homicide committed by a company or organisation. In general, in English criminal law, a juristic person is in the same position as a natural person, and may be convicted for committing many offences...
, this does not only apply to the organisation itself; individuals and employees may also be guilty. The offence is one of strict liability
Strict liability
In law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by his or her acts and omissions regardless of culpability...
, with no need to prove any kind of intention or positive action. It is also one of vicarious liability
Vicarious liability
Vicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability...
; a commercial organisation can be guilty of the offence if the bribery is carried out by an employee, an agent, a subsidiary, or another third-party, as found in Section 8. The location of the third-party is irrelevant to the prosecution— according to David Aaronberg and Nichola Higgins in the Archbold Review, "therefore, a German business with retail outlets in the UK which pays a bribe in Spain could, in theory at least, face prosecution in the UK". Under Section 7(2), the commercial organisation has a defence if it can show that, while bribery did take place, the commercial organisation had in place "adequate procedures designed to prevent persons associated with [the organisation] from undertaking such conduct". Under the Act's explanatory notes, the burden of proof in this situation is on the organisation, with the burden of proof being "on the balance of probabilities".
Guidance was published by the Secretary of State three months before the Act came into force. The Guidance sets out 6 principles to be followed by business. They cover such topics as Proportionate Procedures, Top-level Commitment, Risk Assessment, Due Diligence, Communication (including training) and Monitoring & Review. The one firm conclusion to be drawn from the Guidance is that every commercial organisation that might be subject to the rigours of the Act needs to have a code of conduct in place that appropriately reflects the Guidance and to ensure its personnel are fully conversant with the risks and adequately trained. If it is then charged with the offence of failing to prevent bribery, it would be able to show evidence of the ‘adequate procedures’ which it will need in order to defend itself.
Prosecution and penalties
Section 10 requires the authorisation of any prosecution by the director of the appropriate prosecution agency before a case can go ahead; this is a shift from the old regime, which required the consent of the Attorney General for England and WalesAttorney General for England and Wales
Her Majesty's Attorney General for England and Wales, usually known simply as the Attorney General, is one of the Law Officers of the Crown. Along with the subordinate Solicitor General for England and Wales, the Attorney General serves as the chief legal adviser of the Crown and its government in...
. Section 11 explains the penalties for individuals and companies found guilty of committing a crime. If an individual is found guilty of a bribery offence, tried as a summary offence
Summary offence
A summary offence is a criminal act in some common law jurisdictions that can be proceeded with summarily, without the right to a jury trial and/or indictment .- United States :...
, they may be imprisoned for up to 12 months and fined up to £5,000. Someone found guilty on indictment
Indictable offence
In many common law jurisdictions , an indictable offence is an offence which can only be tried on an indictment after a preliminary hearing to determine whether there is a prima facie case to answer or by a grand jury...
, however, faces up to 10 years' imprisonment and an unlimited fine. The crime of a commercial organisation failing to prevent bribery is punishable by an unlimited fine. In addition, a convicted individual or organisation may be subject to a confiscation order under the Proceeds of Crime Act 2002
Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 is an Act of the Parliament of the United Kingdom which provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money laundering legislation in the UK.-Background:...
, while a company director who is convicted may be disqualified under the Company Directors Disqualification Act 1986
Company Directors Disqualification Act 1986
Company Directors Disqualification Act 1986 is a piece of UK company law, which sets out the procedures for company directors to be disqualified in certain cases of misconduct.-History:...
.
Other provisions
The scope of the Act's provisions is set out in Section 12. For someone to fall within the Act's purview, they must have either committed a crime inside the United Kingdom, or acted outside of the United Kingdom in a way which would have constituted a crime had it happened in the UK. For a prosecution in the latter case, the person must have a "close connection" to the UK, which includes being a British citizen, resident or protected person, a company incorporated in the UK, or a Scottish partnership. Section 13 provides the only defence available with the general bribery offences—that the conduct was necessary for the proper functioning of the intelligence services or, when engaged in active service, the armed forces. Under Section 14, senior officers or directors in a company which commits a general bribery offence will also be liable for the purposes of the Act. In the case of an offence committed by a partnership, Section 15 provides that the prosecution must be brought in the name of the partnership and not in the name of any of the partners.Under Section 16, the Act applies to servants of the crown
Crown servant
In the United Kingdom, a Crown servant is an officer of HM Government employed under the Crown whose duties of employment are of a public nature and whose salaries are paid out of public funds.-The Official Secrets Act 1989:...
, while Section 17 repeals all previous common law and statutory offences relating to bribery, replacing them with provisions of the Act. Section 18 provides that the Act applies to England and Wales, Scotland and Northern Ireland; while the separate consent of the Scottish Parliament
Scottish Parliament
The Scottish Parliament is the devolved national, unicameral legislature of Scotland, located in the Holyrood area of the capital, Edinburgh. The Parliament, informally referred to as "Holyrood", is a democratically elected body comprising 129 members known as Members of the Scottish Parliament...
is usually required in such cases, as is made clear in Section 19, a Legislative Consent Motion was passed on 11 February 2010, allowing for the application of the Act within Scotland.
Assessment
The Act has been described as "the toughest anti-corruption legislation in the world", raising the bar above the standard set by the United States Foreign Corrupt Practices ActForeign Corrupt Practices Act
The Foreign Corrupt Practices Act of 1977 is a United States federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials.- Provisions and scope...
. Despite being "widely drafted and far-reaching in scope [and] in many ways an improvement on earlier corruption legislation", significant concerns have been raised, mainly around the fact that the Act may harm British industry's competitiveness in the global market. David Aaronberg and Nichola Higgins, writing in the Archbold Review, argue that section 6 particularly has the potential to include actions which are ethically problematic but seen as legally permissible. Aisha Anwar and Gavin Deeprose in the Scots Law Times
Scots Law Times
The Scots Law Times is the law reports service in Scotland, publishing over 1400 pages of reports each year. Published weekly during court term, the Scots Law Times covers every Scottish court, civil and criminal, from the Sheriff Courts to the House of Lords.Since 2000, the Scots Law Times...
take a similar line, highlighting as particularly problematic areas corporate hospitality and facilitation payments, described as "essentially a form of extortion on the payer and, although not a common feature in the UK, they are commonplace in many international jurisdictions", which may fall under the scope of the Act despite being permissible in the commercial world.