The UK’s Bribery Act of 2010: The Obligations and Risks It Imposes on US Employers with Business in the UK
[Readers: The article below was prepared by our colleagues, Nick Burkill and Joanne McGilloway of Dorsey’s London office. Nick is the Co-Head of our London office Trial Group. He can be reached at: email@example.com, or by phone at, +44(0)20.7588.0800. Additional information regarding Nick is available at: http://www.dorsey.com/burkill_nick/. Joanne is an attorney and trainee solicitor in Dorsey’s London office. If you have any questions about the information set forth below, please don’t hesitate to contact Nick directly. We hope you find this information helpful.]
By: Nick Burkill and Joanne McGilloway
The UK Bribery Act is expected to come into force shortly. The Act was implemented in response to pressure on the UK to reform its outdated anti-corruption legislation. The scope of the Act is broader than that of the Foreign Corrupt Practices Act (“FCPA”). Whereas the FCPA only applies if the recipient is a foreign official, the Bribery Act 2010 will cover all bribes, regardless of the recipient’s status. The new Act has extra-territorial effect and has implications for any corporation or group carrying on part of its business in the UK, regardless of where it is incorporated.
The Serious Fraud Office (“SFO”), the UK agency charged with investigating and prosecuting corruption, has backed up its threats of real action to enforce the Act with a series of prosecutions in 2010 under the existing legislation. Companies based in the US also should be aware that US regulatory agencies have been achieving results working alongside the UK authorities in order to bring criminal proceedings on both sides of the Atlantic, leading to the prosecution of companies and individual officers.
• Bribery Offenses
The Act creates four new offenses. These are:
(1) Bribing, giving, promising or offering a bribe
(2) Being bribed, requesting, agreeing to receive or accepting a bribe
(3) Bribing a foreign public official
(4) Failing to prevent bribery where an associated person pays a bribe to obtain or retain a business advantage for a commercial organization.
• Extra-Territorial Effect
The basic bribery offenses of bribing and receiving a bribe apply to acts or omissions that take place in the UK or outside it if one of the parties involved has a close connection with the UK (for example, if a party is a UK registered company or UK resident).
The Act also imposes strict liability on commercial organizations that fail to prevent payment of a bribe in connection with its business by those acting on their behalf (so called “associated persons”), where the bribery was intended to obtain or retain a business advantage for the company . “Associated person” includes people who perform services for, or on behalf of, the commercial organization regardless of their capacity. This covers employees, agents, subsidiaries and even joint venture partners.
The strict liability offense applies not only to bodies incorporated in the UK, but also covers foreign companies which conduct business there even if the offense occurs elsewhere. As a result, a US group with a UK subsidiary, could still incur UK liability for payments made by a sister company based in a third country to persons there. The offense applies to companies even if they only possess a minor presence in the UK. Furthermore, there is no requirement for the associated person to have any connection with the UK. Read more
Readers: Presented below is the fourth article in our Leadership series. This article was submitted by Christine Esckilsen. Ms. Esckilsen is a Managing Director in the General Counsel Department at Piper Jaffray’s Minneapolis headquarters. Ms. Esckilsen has had the benefit of observing leadership skills as both in-house and outside counsel. Moreover, she herself is a leader within the Piper organization. As such, she brings a unique perspective to this important topic.
Reflections on Leadership
By: Christine Esckilsen
Every company has its own culture. I work for an investment bank. Perhaps you are now thinking bailout money (we didn’t take any), proxy statements, red-eye flights, sharp elbows and Brooks Brothers ties. Fair associations all. Yet working here has taught me that effective leadership is best accomplished by being present, open, and connected, concepts addressed below. Why is this important? Because the key to effective leadership is developing engaged employees. We cannot truly engage others unless we are present, open, and connected with them.
To accomplish this, we need to draw on our mind, physical body and emotions. As Americans, we prize and stress the intellect. So, the true work comes in understanding and managing the physical body and the emotions. Once we accomplish this, we can mobilize our teams and feel good doing it! For the skeptics, I submit to you that if this model of successful leadership can work at an investment bank, it can work anywhere. Read more
Readers: Bill Wernz, the former Executive Director of the Office of Lawyers’ Professional Responsibility, has written an article for Minnesota Lawyer (July 12, 2010, Vol. 14, No. 28) that focuses on ethical issues recently addressed in our blog. With approval from Minnesota Lawyer, Bill’s article is reprinted below.
Steve Champeau, the author of the third article in this leadership series is one an inspirational leaders. The CEO of Trans-Alarm, Inc. (http://www.transalarm.com/index.cfm) for the last several years, Steve previously had extensive experience in critical leadership roles at other national and international companies. Steve’s insights into leadership, set forth in his article below, illustrate why he inspires those around him.
By: Steve Champeau
Change is good…You go first.
After 22 years of growing a very small business into a medium size business and having it acquired by a big business which I then led as well, I eventually decided to move on to join a small company again. Creating the 100-day plan for my new venture was exciting, but nothing could prepare me for the reality of what I was actually going to face. The people, culture, systems, customers, products, scale and cash flow were all quite different from what I left. Not bad, just different. Thankfully, the leadership requirements of the job were identical. Best-selling author Mac Anderson wrote the book titled, Change Is Good…You Go First, and I reflected long and hard about the change management process before I decided to leave.
I’m glad I made the change, and here is what I learned in the process: Read more