The BriberyAct 2010 (BA) is defined as “giving or receiving a financial orother advantage in connection with the “improper performance” of aposition of trust, or a function that is expected to be performed impartiallyor in good faith”1.
Withthe BA 2010 Act, the law has moved away from considering the narrow duty owedby an agent to his principal and instead considers the duty owed by those in aposition of authority to all those with whom they deal and to the public atlarge. The general bribery offences make no distinction between bribery in thepublic or private sphere, the focus of the offences is the harm to society atlarge rather than simply the harm to the principal of the corrupt agent. The first ever legislative actwhich included bribery was the Bubble act 1720. The 1720 act, produced anoffence of commercial deception, and was recognised following the downfall ofthe South Sea Company; “which has been described by academics as a grandiosescheme that manipulated the parliamentary system through generous bribes”2. After the repeal of thebubble act there was an emptiness in the law consistent to corruption as noprovisions were made to overtake its place. This matter was somewhat decided inthe formation of the public Bodies Corrupt Practices Act 1889. The title wasonly linked to the corruption happening in the state and other public bodies.Under the old laws in the UK, while acceptance of a bribeby a public official was a crime, acceptance of a bribe by a private actor wasnot a crime, unless contrary to agency law.
To be liable for bribery under theBA 2010, the test is whether a reasonable person in the UK thought it a bribe.For example, it is likely that a reasonable person in the UK would think itbribery for a pharmaceutical company to pay doctors who prescribe its productsto patients. In 2012, in an example from the USA, a British pharmaceuticalcompany, GlaxoSmithKline, settled topay $3 billion in a case where the prosecutors said the company had tried towin over doctors by paying for trips to Jamaica and Bermuda. The act was announcedto amend and improve UK law on bribery together with foreign bribery in anattempt to highlight the better requirements of the 1997 OCED anti-briberyConvention. Globally, it can be classed as one of the strictest legislation onbribery as well as representing the most drastic changes to anti-corruptionregulation in the UK.
Not to forget, it also introduced a new liability offenceespecially created for companies and partnerships for taking inadequatemeasures to prevent bribery. Itis important to prevent bribery as bribery undermines democracy and the rule oflaw, and poses very serious threats to sustained economic progress indeveloping and emerging economies and to the proper operation of free marketsmore generally. Unfortunately, the effect ofthese new amendments have proven to be less successful. Even with supervisionfrom “the Ministry of Justice and Serious Fraud Office (SFO) directors, therestill remains significant uncertainty among businesses regarding interpretation, particularly relating to ‘foreign publicofficials,’ hospitality and facilitation payments, self- reporting, sentencingand fines, adequate procedures, and the meaning of ‘associated person’ and’relevant commercial organisation”3. Itseems as though that the theoretical suggestions of the UKBA will be based onhow the SFO aims to apply its implementation authority.
Consequently, in replyto these underlined uncertainties, it will be emphasized that businesses haveno real choice but to impose a strict anti-corruption regime in an attempt tominimise the risk of them sustaining criminal charges for their fraudulentbehaviours under the UKBA.For example, in the case of Sweett Group Plc, the company pleaded guilty in 2015 as they failedto prevent an act of bribery that was planned to secure a contract with Al AinAhlia insurance Company, in contrast to Section 7(1)(b) of the Bribery Act2010. The contract was summarised by the sentencing judge (HHJ Beddoe) as a vehicleto provide a “bung” and therefore, was “sentenced and ordered to pay £2.25million as a result of a conviction arising from a Serious Fraud Officeinvestigation into its activities in the United Arab Emirates”4. This shows how the lackof anti-corruption regime could lead companies in a massive financial loss thusthe only way the companies can avoid being convicted of the offence of failingto prevent bribery by showing that they had adequate procedures in place toprevent bribery. The standard of proof which the commercial organisation wouldneed to discharge in order to prove the defence, in the event it wasprosecuted, is the balance of probabilities.The SFO’s guidance in regards to foreign public officials canbe seen as extremely confusing as it still fails to deliver the precise amountof control that must be applied by the state’s legislatures over the corporation’sdealings to “qualify those representatives as foreign public officials”5.
It is suggested that theSFO should be able to provide more guidance in order to minimise the risk of UKbusiness suffering criminal liability and the financial loss. Lim makes a validargument, “that in response to the continuing confusion, UK businesses shouldbe vigilant when dealing with companies in foreign countries, and perhaps erron the side of regarding them as State-owned enterprises employing foreignpublic officials”.6As a result, this would reduce the fines and imprisonment convictions.Prior to the UKBA 2010, UK anti-bribery law contained of the common lawoffence of bribery as well as the Public Bodies Corrupt Practices Act 1889 andthe Prevention of the Corruption Act 1906. Itwas an offence for a person to bribe the holder of a public office, or for anysuch office holder to accept such a bribe.
In R. v Whitaker (1914),where Lawrence J said: “A publicofficer is an officer who discharges any duty in the discharge of which thepublic are interested, more clearly so if he is paid out of a fund provided by the public. If taxes go to supply his payment and thepublic have an interest in the duties he discharges, he is a public officer”7.The Prevention of the Corruption Act 1906 “concerns corruption of agents. S.1offence made it an offence for an agent to obtain a consideration as aninducement or reward for doing any act, or showing favour or disfavour to anyperson, in relation to his principal’s affairs”8.In the case of R v Godden-Wood (2001),the appeal was unsuccessful against his conviction for conspiracy to corrupt “wherethe circumstantial evidence against the appellant was compelling, there was nodistinction between corruption in terms of the Prevention of Corruption Act1906 and corruption in the context of public bodies”9. In contrast, with thecase of R.
v J (2013) where thejudge focused on the definition that the payment was made ‘corruptly’ and “Corruptly”meant purposefully doing an act which the law forbade as tending to corrupt.This form of law was termed as “inconsistent, anachronistic andinadequate”10 inregards to its “capacity to comply with modern international anti-corruptionobligations”11. Briberylegislation reform in the UK was “undeniably driven by the conclusions in the’Nolan Report’ produced by the Committee on Standards in Public Life in 1995″12.One of the main points highlighted in the report was that “public officials, on leavingoffice, were taking up positions in companies with which they had had official dealings”13.Thus, the Nolan report suggested reforms of the law on bribery. In the report it was also mentioned that it is acknowledged that the existing practical law “governing bribery in theUK is characterised by complexity and uncertainty”14.
Thereport also confirmed the insufficiency of the UK’s anti-corruption system atthat particular time. Hence, it was highly recommended by the UK governmentthat the Law Commission to reconsider the rules as soon as possible. In 2008, The Organization for EconomicCooperation and Development (OECD), working group published a report criticising,UK for failing to stop bribes being paid by its businesses in the markets in aforeign country. “Overall, the Group is disappointed and seriously concernedwith the unsatisfactory implementation of the Convention by the UK.” 15This report shows the disappointment felt by the Working Group in regards tothe insufficiencies in the UK government’s tactic and their constant delay inexecuting the requests of the agreement. Undeniably, this disapproval was a keyinfluential factor towards prompting the government to introduce reform in thisarea of the law.
TheUK government aimed at establishing a clear legal, regulatory and policyframework for action against foreign bribery. An example of the case that seems to have obliged the UK Government totake absolute corrective action, was the bribery scandal of BAE Systems plc. “In December 2004, awhistle-blower claimed that BAE controlled and availed of a US$120 millionbribery fund to facilitate the securing of defence contracts, a practice thathad allegedly been undertaken for decades. The disclosure triggered a SFOinvestigation.16It was alleged that “BAE had paid massivebribes to Saudi royals”17 in order to secure acontract which later known as the Al Yamamah transaction.
“Al-Yamamah istechnically an agreement between the British and Saudi governments, with BAE asthe prime contractor supplying the planes and military equipment”18. However, despite theserious allegations made against BAE systems, SFO dismissed their inquirystating that UK’s national security was at risk.Onemajor problem in reducing bribery in the commercial world “has always been onhow to hold the company as an entity liable for bribery”19. This can be due to thefact that as opposed to a natural person who has a mind to carry out theillegal acts, the company “being an artificial entity, has no mind of its own.To overcome this problem, the law developed a doctrine of attribution whereacts of senior officers of the company are attributed to the company”20. In Tesco Supermarket Ltd v.
Nattrass (1972), LordReid said that “the person acting for the company is an embodiment of thecompany, and his mind is the mind of the company, such that if it is a guiltymind, then that guilt is the guilt of the company. However, the rules oncorporate attribution depend on involvement of senior officers of the company,and are deficient where only junior officers are involved in the relevant criminalacts the BA 2010 goes beyond attribution”21.Theproblem of bribery is a destructive one and weakens our trust in markets aswell as assurance in the rule of law. The aim of the law on bribery just focuson protecting and improving free markets for commercial dealings. as we areaware, that whilst UK had been slow in reforming its laws on bribery in regardsto foreign corrupt payments by UK companies and agents, the BA 2010 can be seenas a ray of hope that potential changes are occurring, which may result in amore “fundamental cultural change in the practices of many UK companies”22.By taking a controlling authorisation tactic for commercial bribery, the BA2010 is likely to be a more effective law not only for reducing bribery, butalso for guarding and improving free markets for commercial transactions.
The down side of the act canbe that the penalties enforced on the individuals or the business can be tooharsh. Even-though, the strict penalties will force the companies to take morecontrol over their anti-bribery regime but the question is does it go too far?Does the act put more difficult rules on these UK companies so they are losingout and are behind in the market compared to their foreign competitors? Asunder this act, unlimited fine can be given to an individual or 10-yearimprisonment.Overall, the UKBA 2010 doescertainly have huge potential, but its real-world effects have yet to beillustrated. It is very obvious that the UK is taking action against corruptionby enforcing a zero-tolerance method on the business related crimes however,Government’s ambition of finishing bribery in the UK will still take more time.Without “greater global harmonisation of anti-bribery law and enforcement,ambiguities will remain, as one man’s bribe is another man’s gift”23. In addition, it is alsovery clear that the fundamental renovation of the law the UKBA 2010 symboliseswas undeniably a result of severe global criticism and UK’s Governmenthumiliation concerning the BAE scandal. Despite the Act’s enactment, and thestates guidance on several issues, important concerns still exist within thecommercial community in regards to the lack of legal certainty surrounding theAct’s clarification of business generosity which needs to be worked on. Section6 of the UK Bribery Act 2010 is also very important in explaining theimportance of the act.
As this offence focuses on the bribery obtained fromforeign public officials for their business. As this jurisdiction is globalthis means that no British Citizen can escape conviction of bribery. This meansthat now the companies are well aware of their stance in receiving gifts andhospitality. The act needs to go under review constantly in order to make thelegislation more effective and prevent the individuals and companies escapingconviction for bribery as this is a criminal offence and individuals needs tobe punished for it.1 http://www.
thebriberyact2010.co.uk/what-is-a-bribe.asp2 http://www.academia.edu/24159559/Bribery_Act_2010_Essay3 https://www.
abdn.ac.uk/law/documents/An_Analysis_of_the_Efficacy_of_the_Bribery_Act_2010.pdf14 ‘Sweett Group PLC Sentenced And Ordered To Pay £2.25 MillionAfter Bribery Act Conviction’ (Serious Fraud Office, 2017)
7 http://swarb.co.uk/rex-v-whittaker-1914/8 https://www.
uk/r-v-peter-david-godden-wood-2001/10Matt Atkins, ‘Introduction to the UK Bribery Act’ (2011) 6 Financier Worldwide511 Dr Karen Harrison & Dr Nicholas Ryder, The Law Relating to FinancialCrime in the UK (2013, Ashgate Publishing) 44.12(N3) 213 Nolan,L. (1995), First Report on Standards in Public Life, The StationeryOffice, London.14Law Commission, Reforming Bribery (Law Com No 313, 2008) The Stationery Office,London 1715 OECDDirectorate for Financial and Enterprise Affairs, ‘United Kingdom: Phase 2bisReport on the application of the convention on combating bribery of foreignpublic officials in international business transactions and the 1997recommendation on combating bribery in international business transactions'(October 2008) org/unitedkingdom/41515077.pdf>accessed 14October 201716 SamerKorkor & Margaret Ryznar, ‘Anti-Bribery Legislation in the United Statesand United 43817 https://www.theguardian.com/world/2007/jun/07/bae1518ibid19Journal of FinancialCrime/2015/Volume 22/Issue 1, 1 January/Articles/British law on corporatebribery – (2015) JFC 22(1), 820ibid21ibid22Tomasic, R.”The financialcrisis and the haphazard pursuit of financial crime”, Journal ofFinancial Crime, Vol. 18 No. 1, (2012), 12 23 DanHyde, ‘In Practice: Practice Points: “Grease” is the word’ (17 June 2013) 22Law Society Gazette.
org/unitedkingdom/41515077.pdf>accessed 14October 201716 SamerKorkor & Margaret Ryznar, ‘Anti-Bribery Legislation in the United Statesand United 43817 https://www.theguardian.com/world/2007/jun/07/bae1518ibid19Journal of FinancialCrime/2015/Volume 22/Issue 1, 1 January/Articles/British law on corporatebribery – (2015) JFC 22(1), 820ibid21ibid22Tomasic, R.”The financialcrisis and the haphazard pursuit of financial crime”, Journal ofFinancial Crime, Vol.
18 No. 1, (2012), 12 23 DanHyde, ‘In Practice: Practice Points: “Grease” is the word’ (17 June 2013) 22Law Society Gazette.