UK Bribery Act Off to a Weak Start
by Daniel Klein, Podolsky & Klein

It’s been more than 6 months since the United Kingdom has enacted its much publicized Bribery Act (the UKBA). As compared with the US’s Foreign Corupt Practices Act (FCPA) is much more far reaching as it addresses not only corrupting government officials but also kick backs between individuals on a pure corporate level. In terms of actually convictions, there has only been one to date. The first conviction under the Act was Munir Yakup Patel who worked at Redbridge Magistrates' Court at the time of the incident in August. A court clerk, he took a £500 bribe to avoid putting details of a traffic summons on a court database and infamously ended up with a six-year prison sentence. While most were expecting the act to be used initially against multi-nationals bribing abroad, apparently its broad reaching tentacles have found uses closer to home. Unlike the FCPA (enacted in 1977) which took many decades before the US government began going after violators, in the past 6 months it is reported that more than 50 cases have been opened by the Serious Frauds Office (SFO).  According the UKBA it is important to take proportionate  measures in order to prevent corruption. Company’s that operate in countries and/or industries that are renowned for corruption need to take appropriate measures commensurate with the country’s  and/or industry’s reputation for corruption. That does not mean that a company needs to guarantee that there will not be any corruption but what it does mean is that  a company needs to put relevant and realistic internal policies in place to reduce the likelihood of corruption if corruption is likely. For example, it might mean that companies would need to conduct due diligences on their counterparties or suppliers; or put certain provisions in agreements with counterparties forcing those counterparties to guarantee that they will engage in corrupt activities. If a company has the proportionate measures in place, and bribery does occur, the SFO should consider the pre-emptive measures and determining whether to try to prosecute or not.

Contributed by Daniel Klein, Podolsky & Klein

klein@pklawpartners.com

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