Pre Employment Screening & Validation Services

1D Mereworth Business centre,
Hermitage Farm, Danns Lane,
Wateringbury, Kent. ME18 5LW

Tel: 01622 817580
Fax: 01622 813675

Secure Screening Logins

Applicant Login

Client Login

UK Bribery Act Guidance: Muddy[ing] the Waters

By describing its “talismanic” credo to be “common sense,” the Ministry of Justice failed miserably in providing real guidance or explaining a real prosecution policy. The Ministry of Justice owes businesses more than general pronouncements. In the end, companies have to comply with the UK Bribery Act. Businesses need to recognize that ultimately it will be prosecutors and the courts that will draw the lines; there is nothing surprising in that. The inevitable result is that prosecutors will define the limits through its enforcement actions, while the courts will have a chance to review such actions. As demonstrated in the BAE case, the UK courts are more than willing to review and reject prosecutors’ proposed settlements and enforcement actions. That is how a healthy judicial system operates. This contrasts with the US system, where courts have been unable or unwilling to review and challenge the Justice Department’s enforcement of the Foreign Corrupt Practices Act.
Punting on “Guidance”
As Yogi Berra’s quote demonstrates, companies now must decide how to comply with the UK Bribery Act by relying on “Guidance” which provides no clarity whatsoever other than meaningless platitudes. Some examples demonstrate our point:
Application of the UK Bribery Act to Non-UK Companies: As written, the UK Bribery Act applies to any company that “carries on a business or part of a business” in the UK, regardless of its place of incorporation or primary location. To provide some comfort to business concerns about wide application of the Act to non-UK companies, the Guidance points out that the determination of this issue will be decided by the UK courts, and tries to carve out two possible scenarios by explaining: a. “the mere fact” that a company’s securities have been listed on the London Stock Exchange will not subject it to the Bribery Act’s jurisdiction; and
b. having a UK subsidiary would not, “in itself,” be sufficient to subject a parent company or its affiliates to the Bribery Act’s jurisdiction, “since a subsidiary may act independently of its parent or other group companies.” Companies can rest assured now that the UK courts will decide this issue. For in-house counsel, we are sure they are breathing a sigh of relief. The two specific scenarios are really not that realistic at all – you can bet that if a non-UK company engaged in any serious bribery, the UK courts will have no difficulty in finding that the non-
UK’s activities in the UK are sufficient to fall within the jurisdictional requirement.
Corporate entertainment and promotional expenditures: The plain language of the Bribery Act broadly prohibits the kinds of entertainment and promotional expenditures that are routinely made by most companies. The Guidance provides assurances that prosecutors will not bring prosecutions for routine activities: “Hospitality or promotional expenditure which is reasonable, proportionate and made in good faith is an established and important part of doing business. The Act does not seek to penalize such activity.” Where will the line be drawn between “reasonable, proportionate and good faith” expenditures and prohibited hospitality? As explained by the Ministry of Justice, lavish or disproportionate hospitality expenditures will be
barred by the Act. Again, the failure to guide leads to more uncertainty for businesses, and punts the issue to prosecutors and the courts.
Adequate Procedures Defense to Corporate Strict Liability for “Failure to Prevent Bribery: While the Act provides a complete defense of “adequate [compliance] procedures” to a corporate “failure to prevent” bribery charge, the Guidance provides little help other than the observation “no bribery prevention regime will be capable of preventing bribery at all times,” and its desire not to impose harsh sanctions on “well run commercial organizations that experience an isolated incident of bribery on their behalf.” The “Prosecution Guidance”
issued on the same day stated that “a single instance of bribery does not necessarily mean that an organization’s procedures are inadequate. For example, the actions of an agent or employee may be willfully contrary to very robust corporate contractual requirements, instructions or guidance.” For companies, this provides little comfort. Almost every prosecutor in the US and the UK would decline a case where there was a “single” or “isolated” occurrence of bribery, especially when such incident occurred despite a robust compliance program. If common sense is the guiding principle, then the guidance has provided little guidance to companies.
The Political Dance is Over: Now Comes the Real Work
For companies facing the July 1 effective date, the challenge is the same as before: review existing anticorruption compliance programs and make sure that the UK Bribery Act is addressed. Whatever the cost, every company’s counsel should be motivated to make sure their company is not the “guinea pig” for the first set of prosecutions under the UK Bribery Act. The “Guidance” provided no guidance, and left companies adopting Yogi Berra’s mantra: “If [we] don’t know where [we] are going, [we] might wind up someplace else.”

Current News

Supreme Court rejects government appeal on criminal records scheme

Man acquitted of rape loses Supreme Court criminal check case

Criminal record check for Tier 2 UK migrants

New guidance for job applicants implemented in drug and alcohol workplace policy

Right to work checks: Extended criminal liabilities for employers

Criminal Records Checks "Arbitrary" and Unlawful

The Emergence of Continuous Screening: Moving Background Screening From Pre-hire Problem Identification to a Threat Management Tool that Helps to Mitigate Risk

FINRA’s New Background Investigation Rule

Woman Sentenced To Prison For Fingerprint Fraud

Everybody Talks: Data Protection and Social Media

DBS filtering on criminal record certificates

UK financial regulation overhauled

The City's new watchdogs: what you need to know

Employment law 2013: progress on reform

What changes to criminal record checks are coming into effect from September 2012?

Olympic security chaos: depth of G4S security crisis revealed

Yahoo CEO steps down after CV embarrassment

Get Out of My Face(book)! When Pre-Employment Screening Goes Too Far

Social Media use: Issues for employers

Employment Law reforms announced

Court of Appeal guidance on references

Anti-bribery and corruption laws - an international guide

Loss of 26,000 housing records highlights poor state of UK data protection

UK Bribery Act Guidance: Muddy[ing] the Waters

Fake identities makes couple thousands

CBI calls for lower taxes in an 'all-action' Budget

HSBC bats down talk of a move to Hong Kong as it 'prefers the City'

Police chief 'lied on CV'

Radical shake-up of the Criminal Record regime and vetting and barring scheme.

Extra Pay Disclosure for the Four Largest Banks - More to Follow for Other Large Banks?

Workplace Disputes and Employer’s Charter

Comprehensive Spending Review: Job cuts 'will create new North/South divide'

Employment Law changes on 1st October 2010

FSA-Changes to the Remuneration Code

Financial sector pay - the latest instalment

Employment Law under the New Coalition Government

Employment Changes from April 2010

Proposed Reduction of the Gender Pay Gap at European Level

Jefferson Hunt Limited joins International membership of NAPBS (National Association of Professional Background Screeners)

Fraud: honesty is the best policy

CV lies and interview technique | The Apprentice

Pre-employment screening as a critical risk-management tool

Exposed: the fakers behind the CV masks

Industry Quotes

“more than 7.5 million of Britain's 25.3 million working population have misled their potential employer while applying for a job.”

Mori .

Quote of the Week

“"Nothing is more noble, nothing more venerable than fidelity. Faithfulness and truth are the most sacred excellences and endowments of the human mind." .”

Industry Sectors

Screening Levels

Criminal Records Bureau Logo which links to CRB site National Association of Professional Background Screeners
© Copyright 2017 JH Ltd   Tel: 01622 817580   Email:

Site Map     Privacy Policy     Terms & Conditions