A UK construction company, “UKCo”, has tendered for a contract with a foreign company “ForeignCo” in which the government holds a majority interest. A whistleblower has reported suspicions of bribery to the company’s compliance officer. Specifically they allege that a colleague leading the bidding process had held one-on-one meetings with a senior representative of ForeignCo. The colleague told the whistleblower that during those meetings it was agreed that in return for accepting the construction company’s bid, a number of payments disguised as ‘consultancy fees’ would be made to a company owned by ForeignCo’s representative, “ConsultantCo”.
- Regardless of whether or not the representative of ForeignCo is a public official under the Bribery Act, the employee who planned this scheme could be found liable for “bribing another person”. That offence carries a potential prison sentence of up to 10 years and an unlimited fine.
- In order to prove this, the prosecution would need to show that the payments (or offer of payments) made to ConsultantCo were intended to induce the representative to do something improper in his role at ForeignCo – such as influencing the selection of UKCo’s bid for the tender.
- If this were the case then the UK prosecutors would only need to show that the payments (or offer of payments) to ConsultantCo were intended to influence the representative of ForeignCo in his role for the company with the aim of obtaining or retaining business or an advantage in the conduct of business for UKCo, and that the local written law “neither permitted nor required” the representative to be influenced in that way.
- Under the Bribery Act there is a separate offence applicable to “bribery of foreign public officials.” A “foreign public official” under the Bribery Act can include a person who exercises a public function “for any public enterprise”, therefore it is possible that the representative of ForeignCo could be a public official under the Bribery Act.
- The key difference to the general bribery offence is that the prosecution does not have to demonstrate that the payment was intended to induce the representative to do anything “improper” in their role. Ministry of Justice Guidance recognizes that in most cases an offence of bribery of foreign public officials is likely to involve conduct that is also an offence under the general bribery offence. However, requiring the prosecution to obtain evidence of the exact nature of the functions performed by those regarded as foreign public officials may be difficult to ascertain and therefore it has been removed as part of the evidential burden in any prosecution.
- UKCo itself could face direct liability for both of the above offences if the prosecution can show that its “directing mind and will”, traditionally in the form of the company’s directors or senior officers, also committed the relevant offence.
- Separately, and more likely, UKCo could face liability for the corporate offence of “failure of commercial organisations to prevent bribery” by a person associated with UKCo. Conviction for a failure to prevent offence could lead to an unlimited fine.
- In this case the associated person would be UKCo’s employee who offered or agreed to the make the payments to ConsultantCo, but the definition can extend to anybody providing a service for UKCo.
- It is a defense to any attempted prosecution for failure to prevent bribery if a company can show that, at the time the bribery took place, it had adequate procedures designed to prevent bribery. The UK Ministry of Justice has issued guidance as to what is considered adequate under the Bribery Act, which serves as an essential reference point for companies looking to design an anti-corruption program that meets the standard of the Bribery Act.