UK: Anti-Corruption & Bribery Comparative Guide

1 Legal and enforcement framework

1.1 Which legislative and regulatory provisions govern anti-corruption in your jurisdiction, from a regulatory (preventive) and enforcement (criminal) perspective?

The UK anti-corruption laws are contained in the Bribery Act 2010, which came into force on 1 July 2011. The Bribery Act was enacted to replace outdated and piecemeal anti-corruption laws (one of the pre-Bribery Act anti-corruption statutes dated back to 1889). Furthermore, the existing laws did not meet the requirements of the Organisation for Economic Co-operation and Development (OECD) 1997 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. In its October 2008 report, the OECD said that that it was "disappointed and seriously concerned" with the United Kingdom's implementation of the convention.

The Bribery Act criminalises:

• the giving and receiving of bribes;
• the bribery of foreign public officials; and
• the failure of a commercial organisation to prevent bribery.

However, the Bribery Act is not retrospective and there are instances of conduct prior to 1 July 2011 still being investigated and prosecuted, such as:

• the giving or receiving of a bribe to a person in public office, contrary to the common law (although this was, and is, rarely used);
• the giving or receiving of a bribe of a member, officer or servant of public body, contrary to the Public Bodies Corrupt Practices Act 1889; and
• the giving or receiving of a bribe by an agent of a principal under the Prevention of Corruption Act 1906 (this is the most common type of offence investigated and prosecuted relating to pre-Bribery Act offending).

The Financial Conduct Authority (FCA), while not empowered to prosecute offences under the Bribery Act, does have powers under the Financial Services and Markets Act 2000 to penalise regulated firms which do not have adequate procedures and systems in place to prevent bribery, among other things (please see questions 4.1 and 4.5).

1.2 Which bilateral and multilateral instruments on anti-corruption have effect in your jurisdiction?

The United Kingdom has signed and ratified the following anti-corruption conventions:

• the Convention on the Protection of the European Communities Financial Interests and Protocols, signed in July 1995;
• the Convention on the Fight Against Corruption involving Officials of the European Communities or Officials of Members States of the European Union, signed in May 1997;
• the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions;
• the Council of Europe Criminal Law Convention on Corruption (ETS 173), signed in January 1999;
• the UN Convention against Transnational Organised Crime, signed in December 2000;
• the Additional Protocol to the Criminal Law Convention on Corruption (ETS 191) signed in May 2003; and
• the UN Convention against Corruption, signed in December 2003.

The United Kingdom signed the Council of Europe Civil Law Convention on Corruption (ETS 174) in June 2000, but has not yet ratified it.

1.3 Are there accessible directives or other guidance from enforcement authorities in your jurisdiction?

The following guidance is relevant to the anti-corruption legislation:

• the Bribery Act 2010 Guidance, issued by the Ministry of Justice (MOJ) in March 2011;
• the Joint Prosecution Guidance of the Director of the Serious Fraud Office (SFO) and the Director of Public Prosecutions (DPP) on the Bribery Act 2010, last reviewed in September 2019;
• the Joint Prosecution Guidance of the Director of the SFO and the DPP on Corporate Offending;
• the Deferred Prosecution Agreements Code of Practice;
• the SFO Operational Handbook, Evaluating a Corporate Compliance Programme, released in January 2020;
• the SFO Operational Handbook, Deferred Prosecution Agreements, published in October 2020; and
• the Code for Crown Prosecutors.

1.4 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

Both the SFO and the Crown Prosecution Service (CPS) are responsible for prosecuting the UK anti-corruption laws, although the SFO and the National Crime Agency's International Corruption Unit share primary responsibility for investigating allegations of international bribery and corruption. Police forces may also be involved in, or responsible for, the investigation stage.

The SFO possesses compulsory powers, under Section 2 of the Criminal Justice Act 1987, through which it can issue notices compelling individuals and organisations to provide documents or information that it believes are relevant to its investigation. The provision of information extends to situations where an individual can be required to attend for an interview. Failure to comply with such a notice issued by the SFO, without a reasonable excuse, is a criminal offence itself.

Any decision by either the SFO or the CPS to prosecute must be made in accordance with the Full Code Test set out in the Code for Crown Prosecutors and, when contemplating prosecuting offences under the Bribery Act, the SFO/DPP Joint Prosecution Guidance. The Full Code Test requires that the prosecutor be satisfied that:

• there is enough evidence to provide a realistic prospect of conviction; and
• it is in the public interest to bring a prosecution.

Any prosecution for offences under the Bribery Act will also require the personal consent of the director of the SFO or the DPP, as relevant.

1.5 What are the statistics regarding past and ongoing anti-corruption procedures in your jurisdiction?

In March 2019, the House of Lords Select Committee on the Bribery Act published its report entitled The Bribery Act 2010: Post-legislative Scrutiny. From this report, it emerged that between 2011 and 2017, there were:

• 22 prosecutions for active bribery under the Bribery Act, of which 14 resulted in convictions; and
• 13 prosecutions for passive bribery under the Bribery Act, of which 14 resulted in convictions.

The report further revealed that between 2014 and the second quarter of 2018, the attorney general granted consent to prosecute around 107 defendants (both individuals and companies) under the Prevention of Corruption Act 1906 in 28 separate cases brought by both the SFO and the CPS.

In its 2020 report, Exporting Corruption 2020: Assessing Enforcement of the OECD Anti-Bribery Convention, Transparency International noted that the United Kingdom was one of only four ‘active enforcers' of anti-bribery laws out of 47 leading global exporters (43 of which were signatories to the OECD Convention on Combating Bribery). More recently, Transparency International's Corruption Perceptions Index 2021 reveals that the United Kingdom is ranked as the 11th least corrupt country out of 180 countries and scored 78 points out of 100 (with 0 indicating ‘highly corrupt' and 100 meaning ‘very clean').

The United Kingdom is in the latter stages of its Anti-Corruption Strategy 2017–2022, which was announced in December 2017 to provide a framework to guide government anti-corruption policies and actions. One of the various initiatives taken by the UK government to reduce the impact of corruption on trade and investment internationally as part of this strategy includes the Foreign, Commonwealth and Development Office being responsible for work in up to 35 countries to support the ease of doing business and trade facilitation reforms, to be delivered through UK government programmes which will make £1.3 billion available between 2017 and 2022 to promote economic growth in developing countries.

1.6 What are the shortcomings identified in your jurisdiction's anti-corruption legislation (including recommendations of the Organisation for Economic Co-operation and Development, where applicable)?

One of the sustained criticisms of anti-corruption investigations, especially in respect of the SFO, is delay. This delay has been explained by the SFO as being a result of the large and complex nature of such cases, together with difficulties associated with obtaining evidence from overseas, given that many anti-corruption offences involve foreign jurisdictions. Notwithstanding these issues, it regularly takes over a year for cases to reach a charging decision and several years more to reach trial; this is evidenced by the fact that it is not unheard of for there still to be investigations relating to pre-Bribery Act offences, even though the Bribery Act has been in force for over 10 years now. For example, in the Rolls Royce case, the SFO announced its investigation into Rolls Royce in December 2012; reached a deferred prosecution agreement (DPA) with the company in January 2017; and closed its investigation into individuals in February 2019 (i.e., over six years after commencing its investigation).

The report of the House of Lords Select Committee on the Bribery Act noted the OECD's previous criticism of a lack of cooperation and coordination between the various domestic bodies engaged in investigating and prosecuting bribery. In its 2019 Phase 4 Two-Year Follow-Up Report, the OECD noted the United Kingdom's full implementation of the recommendation that it mobilise its agencies to detect foreign bribery committed by UK companies operating abroad. This was achieved through:

• the creation of the Bribery and Corruption Threat Group (designed to ensure multi-agency coordination in respect of international bribery and corruption); and
• the establishment in October 2018 of the National Economic Crime Centre (another multi-agency team which coordinates and oversees the United Kingdom's response to economic crime).

The OECD recommended that the United Kingdom ensure that Article 5 of the Anti-bribery Convention (i.e., foreign bribery investigations and prosecutions must be protected from undue political interference) is made clearly binding on investigators and prosecutors at all stages of a foreign bribery investigation or prosecution. While the United Kingdom considers that its guidance (set out at question 1.3) is sufficient to comply with Article 5, it has nevertheless amended a memorandum of understanding between domestic UK law enforcement organisations to specifically refer to Article 5 and a recognition that all UK prosecutors adhere to it. However, the OECD stated in its 2021 Phase 4 Follow-Up Report that it considers its recommendation has only been partially implemented by the United Kingdom.

2 Definitions and scope of application,

2.1 How is ‘public corruption' or ‘bribery of a public official' defined in the anti-corruption legislation?

These specific terms are not defined in the statute. Section 6 of the Bribery Act makes it a criminal offence for a person to directly or indirectly bribe a foreign public official with the intention, by doing so, of:

• influencing him or her in his or her official capacity;
• obtaining or retaining business; or
• obtaining an advantage in the conduct of business.

However, there is an additional requirement for prosecutors to show that the bribe offered to the foreign public official was one that the official was not permitted or required to be influenced by, as determined by the written law applicable to the foreign official.

2.2 How is a ‘public official' defined in the anti-corruption legislation? How is a ‘foreign public official' defined?

‘Public official' is not defined in the Bribery Act, as there is no specific offence under the Bribery Act for bribing a domestic public official. An offence under Section 1 or 2 of the Bribery Act (for more on which see question 2.5) is intended to apply to conduct involving a public official; however, such offences are often charged as an offence of misconduct in public office instead.

A ‘foreign public official' is defined under Section 6(5) of the Bribery Act as an individual who:

1. Holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the UK (or any subdivision of such a country or territory),
2. Exercises a public function –
   
   1. For or on behalf of a country or territory outside the UK (or any subdivision of such a country or territory), or
   2. For any public agency or public enterprise of that country or territory (or subdivision), or
3. Is an official or agent of a public international organisation [i.e., an organisation whose members are countries or a territory; governments of countries or territories; other public international organisations; or a mixture of these Two examples of a public international organisation are the United Kingdom and the World Bank].

2.3 How is ‘private corruption' or ‘bribery in the private sector' defined in the anti-corruption legislation?

These specific definitions do not exist within the anti-corruption legislation, as the Bribery Act does not distinguish between bribery in the public and private sectors (save for the Section 6 offence described in question 2.2). The Bribery Act applies to bribery whether it is in the private sector or involves public officials.

2.4 How is ‘bribe' defined in the anti-corruption legislation?

Under the Bribery Act, a ‘bribe' is, broadly speaking, a financial or other advantage offered/promised/given, or requested/agreed to be received/accepted, with the intention of inducing or rewarding the improper performance of a relevant function or activity. The Bribery Act therefore criminalises both:

• active bribery – that is, the offering of the advantage (Section 1 of the Bribery Act); and
• passive bribery – that is, the request or receipt of the advantage (Section 2 of the Bribery Act).

Under Section 3 of the Bribery Act, a ‘relevant function or activity' is defined as any function of a public nature or activity connected with a business performed:

• in the course of a person's employment or by or on behalf of a body of persons; and
• where the person performing the function or activity is:
• • expected to perform it in good faith;
  • expected to perform it impartially; and/or
  • in a position of trust by virtue of performing it.

Section 4 of the Bribery Act states that a ‘relevant function or activity' is performed improperly if it is performed in breach of the expectations set out above.

2.5 What other criminal offences are identified and defined in the anti-corruption legislation?

In addition to the pre-Bribery Act offences identified in question 1.1 and the offences created by Section 1 (the offering/promising/giving of a bribe), Section 2 (the request/agreeing to receive/acceptance of a bribe) and Section 6 (bribing a foreign public official) of the Bribery Act, the Bribery Act introduced a new offence of a commercial organisation failing to prevent bribery.

Under Section 7, a commercial organisation (ie, a company or partnership) commits an offence (‘failure to prevent') if it fails to prevent an associated person (defined in question 3.3) from bribing another person with the intention to obtain or retain business, or an advantage in the conduct of business, for the commercial organisation. The sole defence to a failure to prevent offence is for the commercial organisation to prove, on the balance of probabilities, that it had adequate procedures in place designed to prevent associated persons from committing bribery offences. While ‘adequate procedures' are not defined within the Bribery Act, the Bribery Act 2010 Guidance issued by the Ministry of Justice (MOJ) (which accompanied the introduction of the Bribery Act) contains six principles that companies should bear in mind when putting in place procedures to prevent bribery (see question 4.2). However, the MOJ guidance also does not define ‘adequate procedures' and has been criticised for not stipulating what would be deemed to be adequate procedures. The House of Lords Select Committee on the Bribery Act has recommended that the MOJ guidance be expanded to provide more examples and to suggest procedures which would, if adopted by small and medium-sized enterprises, be likely to amount to adequate procedures.

2.6 Can both individuals and companies be prosecuted under the anti-corruption legislation?

Yes. Individuals and companies can be prosecuted for pre-Bribery Act offences and can also both be prosecuted under Sections 1, 2 and 6 of the Bribery Act. However, with regard to companies, to establish corporate criminal liability, the prosecution must prove that a senior individual or individuals in the concerned company who represent its ‘directing mind and will' have committed the offence in question. It is well recognised in the United Kingdom – particularly given the complex structures that apply to many large and sophisticated companies – that the need for prosecutors to identify the directing mind and will can be a difficult exercise.

Failure to prevent is a specific standalone offence that applies to companies only and which negates the need for the prosecution to prove that the offence was committed by the directing mind and will of the company (see question 2.5).

If it is proved that a company committed an offence under Section 1, 2 or 6 of the Bribery Act with the consent or connivance of senior management of the company, then by virtue of Section 14 of the Bribery Act, senior officers of the company will also be deemed guilty of the same offence in an individual capacity and will be liable to prosecution, provided that they have a close connection with the United Kingdom.

2.7 Can foreign companies be prosecuted under the anti-corruption legislation?

Yes. A prosecution of a foreign company for offences under Section 1, 2 or 6 of the Bribery Act can take place even where none of the conduct took place in the United Kingdom; however, the person responsible for the relevant conduct will still need to have a close connection with the United Kingdom. Section 12(4) of the Bribery Act defines a ‘close connection with the United Kingdom' as meaning that, at the time of the alleged offence, the person was:

• a British citizen;
• an individual ordinarily resident in the United Kingdom; or
• a body incorporated under any law of the United Kingdom.

A foreign company can also be prosecuted for the failure to prevent offence, provided that it carries on a business or part of a business in any part of the United Kingdom. While the failure to prevent offence stipulates that an associated person can only bribe another person if he or she is, or would be, guilty of an offence under Section 1 or 6 of the Bribery Act, the offence can still be made out notwithstanding that the associated person does not have a close connection with the United Kingdom. A foreign company can thus still be prosecuted for failure to prevent, even where the conduct takes place outside of the United Kingdom.

2.8 Does the anti-corruption legislation have extraterritorial reach?

Yes. Section 12 of the Bribery Act makes it plain that offences under Sections 1, 2 and 6 can be committed even where the offence takes place outside the United Kingdom. In order for the Bribery Act to apply in those circumstances:

• the person's acts or omissions performed outside of the United Kingdom must have formed part of an offence under the Bribery Act had they been committed in the United Kingdom; and
• the person must also have a close connection with the United Kingdom (as defined in question 2.7).

As set out in question 2.7, the failure to prevent offence has extraterritorial reach.

3 Corruption and bribery

3.1 How are gifts, hospitality and expenses treated in your jurisdiction?

As the foreword to the Bribery Act 2010 Guidance issued by the Ministry of Justice (MOJ) recognises, combating bribery involves both common sense and proportionality. The guidance adds: "Rest assured – no one wants to stop firms getting to know their clients by taking them to events like Wimbledon or the Grand Prix." The guidance further recognises that bona fide hospitality and promotional or other business expenditure seeking to improve a company's image, better present its products and services, or establish cordial relations is an "established and important part of doing business".

However, gifts, hospitality and expenses are recognised as vehicles through which bribes can be made. The context in which the gifts, hospitality or expenses are offered or received, and their nature, are important in determining whether they are in fact bribes or bona fide expenditure. The more lavish or expensive they are (particularly when compared to the standards or norms of the relevant sector), the stronger the inference will be that they are bribes. For example, offering a five-star, all-expenses paid holiday – particularly to a location unconnected with the offeror's business operations – to a key decision maker for the award of contracts would raise a strong inference of bribery. To quote the House of Lords Select Committee on the Bribery Act, it is about drawing "the line between legitimately oiling the wheels of commerce and attempting to gain an unfair business advantage".

3.2 How are facilitation payments treated in your jurisdiction?

Facilitation payments, or unofficial payments made to public officials in order to secure or expedite the performance of a routine or necessary action, can trigger any of the Bribery Act offences. As the Joint Prosecution Guidance of the Director of the SFO and the DPP makes clear, they are illegal under both the pre-Bribery Act offences and the Bribery Act. Facilitation payments are seen as a pernicious form of bribery, as what can seem like small one-off payments not only can lead over time to large amounts in fact being paid over as bribes, but further leave those individuals and/or organisations susceptible to pressure to pay larger bribes.

The MOJ guidance expressly recognises that there are circumstances where there may be no alternative other than to make payments where a defence of duress may be engaged – for example, where the payments are made in order to protect against the loss of life, limb or liberty. The Joint Prosecution Guidance also lists factors to be taken into consideration by prosecutors when deciding whether to prosecute, with the following having particular relevance to facilitation payments:

• Factors tending in favour of prosecution:
• • large or repeated payments, which are more likely to attract a significant sentence;
  • facilitation payments which are planned or accepted as a standard way of conducting business, which indicate that the offence was premeditated;
  • payments which indicate an element of active corruption of the official in the way that the offence was committed; and
  • an individual's failure to correctly follow a company's clear and appropriate policy setting out the procedures to be followed if facilitation payments are requested.
• Factors tending against prosecution:
• • a single, small payment, which is likely to result in only a nominal penalty;
  • payment/s that come to light as a result of a genuinely proactive approach involving self-reporting and remedial action;
  • where a company has a clear and appropriate policy setting out procedures to be followed if facilitation payments are requested and these have been followed; and
  • where the payer was in a vulnerable position arising from the circumstances in which the payment was demanded.

3.3 How is bribery through intermediaries and other third parties treated in your jurisdiction? Can those third parties be held liable?

Bribery through intermediaries and other third parties attracts criminal liability; the offences under Sections 1, 2 and 6 of the Bribery Act recognise that bribes can be offered or received both directly and indirectly. If the bribery in question takes place in the United Kingdom, those third parties or intermediaries can be prosecuted for offences under Section 1, 2 or 6. However, as set out in question 2.8, where the offence takes place outside of the United Kingdom, third parties or intermediaries can be prosecuted under Section 1, 2 or 6 only if they have a close connection to the United Kingdom.

The failure to prevent offence makes it plain that a company can be held liable for bribery committed by an associated person. An ‘associated person' is defined as a person who performs services for or on behalf of the company, and thus may be a company employee, agent or subsidiary.

3.4 Can a company be held liable for bribery committed by management or other employees?

As mentioned in question 2.6, a company can be prosecuted under Section 1, 2 or 6 of the Bribery Act, although this will require the prosecution to prove that a person representing the directing mind and will of the company committed the offence in order to attribute criminal liability to the company. Bribery committed by ‘management' may thus lead to criminal liability for the company, as ‘management' implies someone or a group of people sufficiently senior within the company to represent its directing mind and will. It is unlikely that ordinary employees will be sufficient to represent the directing mind and will of a company; but much will depend on the form and nature of the company (e.g., the seniority of the relevant employees and its size and structure).

However, the offence of failure to prevent was introduced to avoid this specific issue: management and employees both fit the definition of an ‘associated person' (see question 3.3), and offences they commit will thus lead to liability for the company. As at the date of writing, there have been only five prosecutions for this offence. One of those was in the 2018 case of R v Skansen Interiors Ltd, the only contested trial for the offence to date. Skansen was convicted on the basis of its former managing director (a senior employee) having paid bribes to the project manager of a company in order to secure refurbishment contracts worth £6 million.

In April 2022, three companies – Boulting Group Ltd (now trading as WABGS), Tritec Systems Ltd and Electron Systems Ltd – were sentenced after their guilty pleas to the failure to prevent offence, having paid approximately £1.5 million in total as bribes to a former manager at a UK company in return for contracts and confidential information between 2004 and 2013. Boulting Group was said to have benefited by £13 million from the contracts it obtained. More recently, in June 2022, Glencore Energy (UK) Ltd pleaded guilty to (amongst other offences) two offences of failure to prevent bribery in Equatorial Guinea and South Sudan.

3.5 Can a company be held liable for bribery committed by domestic or foreign subsidiaries?

Yes. Section 12 of the Bribery Act states that the failure to prevent offence can be committed irrespective of whether the bribery takes place in the United Kingdom or elsewhere. As set out in question 2.7, companies incorporated or formed outside the United Kingdom are caught by the Bribery Act, provided that they carry on a business, or part of a business, in any part of the United Kingdom. As to whether a business or part of a business is carried on in any part of the United Kingdom, the MOJ guidance indicates that this will be determined by a common-sense approach, with any dispute to be determined by the courts. The MOJ guidance states that the mere fact that a company's securities have been admitted to trading on the London Stock Exchange will not itself lead to that company qualifying as a company carrying on a business, or part of a business, in the United Kingdom. Importantly, it adds that having a UK subsidiary will "not, in itself, mean that a parent company is carrying on a business in the UK, since a subsidiary may act independently of its parent or other group companies".

In the 2015 case of R v Sweett Group plc, the UK parent company pleaded guilty to the failure to prevent offence, as it failed to prevent its Cypriot subsidiary from paying bribes to a senior official at a company in the United Arab Emirates in order to secure a contract worth £63 million relating to the building of a hotel in Abu Dhabi. As another practical example, in 2021 Petrofac Ltd, a Jersey-registered company with a corporate service office in London, pleaded guilty to seven failure to prevent offences, by virtue of which it failed to prevent various senior executives from its multiple subsidiaries paying £32 million in bribes to agents with a view to influencing the award of contracts in Iraq, Saudi Arabia and the United Arab Emirates.

3.6 Post-merger or acquisition, can a successor company be held liable for bribery committed by legacy companies?

Yes. There is nothing in law which prohibits a successor company being held liable for criminal offences committed by the company when under previous ownership or management. However, Paragraph 2.8.2(v) of the Deferred Prosecution Agreements Code of Practice includes an instance where the offence is not recent and the corporate entity has been taken over by another organisation as one of the public interest factors in favour of a DPA rather than prosecution. While DPAs are explained further in questions 5.1 and 5.4, this does not extinguish liability; but it does mean that prosecution may, in certain circumstances, be avoided.

An example of this is the 2021 DPA between the SFO and Amec Foster Wheeler Energy Ltd (AFWEL). In this case, the corporate was charged with offences of conspiracy to make corrupt payments under the pre-Bribery Act legislation and one offence of failure to prevent, with the offending relating to AFWEL's use of corrupt agents in Nigeria, Saudi Arabia, Malaysia, India and Brazil between 1996 and 2014. The company, however, had been acquired twice since the index offending, with the most recent acquisition by John Wood Group plc (described in the judgment as an innocent party) taking place three months after the announcement of the SFO's investigation. Given that John Wood Group was twice removed from the management in place at the time of the offending and was thus an entirely innocent party, the court found that it was entitled to a standalone ‘twice removed' discount when considering the financial penalty element of the DPA.

4 Compliance

4.1 Is implementing an anti-corruption compliance programme a regulatory requirement in your jurisdiction?

No. There is no requirement for a corporate to have a compliance programme in place. However, the lack of one evidently presents difficulties for any corporate investigated for the failure to prevent offence; the lack of an anti-corruption compliance programme will make it extremely difficult, if not impossible, for it to argue that it had adequate procedures in place to prevent bribery. An ineffective corporate compliance programme is a specific public interest factor in favour of prosecution under the Joint Prosecution Guidance of the Director of the SFO and the DPP on Corporate Offending.

For firms which are regulated by the FCA, the FCA does have the power to take regulatory action against those with deficient anti-bribery and corruption systems, regardless of whether bribery or corruption has in fact taken place.

4.2 What compliance best practices should a company implement to mitigate the risk of anti-corruption violations?

As foreshadowed in question 2.5, there are six guiding principles which the Bribery Act 2010 Guidance suggest should be borne in mind when putting in place procedures to prevent an associated person from committing bribery. Those six principles are as follows:

• Proportionality: Anti-bribery policies and procedures should be proportionate to the risks a company faces and the nature, scale and complexity of its activities. They should be clear, practical, accessible and – importantly – effectively implemented and enforced.
• Top-level commitment: The board of directors, owners or any other equivalent body or person of a company should be committed to preventing bribery by associated persons and should foster a culture in which bribery is never acceptable.
• Risk assessment: A company should assess the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by associated persons, with that assessment being periodic, informed and documented.
• Due diligence: Due diligence procedures should be applied which take a proportionate and risk-based approach in respect of associated persons in order to mitigate identified bribery risks.
• Communication: A company's bribery prevention policies and procedures should be embedded and understood throughout the company through internal and external communication, including training, that is proportionate to the risks it faces.
• Monitoring and review: A company should monitor and review procedures designed to prevent bribery by associated persons and make improvements where necessary.

Arguably one of the most important of the six principles, as highlighted by the House of Lords Select Committee on the Bribery Act, is the need for companies of all sizes to carry out a properly documented risk assessment. Without this, it will not be in a position to scope the risk of bribery faced by its operations; nor will it be able to assess how intensive its policies and procedures need to be in order to demonstrate that it has adequate procedures in place which are proportionate to the bribery risks it faces.

4.3 Which books and records requirements have relevance in the anti-corruption context?

Unlike the US Foreign Corrupt Practices Act 1977, the Bribery Act imposes no requirements to keep accurate books and records and to establish and maintain a system of internal controls to ensure accountability for assets. However, the ability to produce not only a company's anti-bribery policies and procedures, but also records of the monitoring and review of, and training relating to, those policies will be important for any company seeking to rely on the defence of adequate procedures when facing an investigation or prosecution for the failure to prevent offence.

The Companies Act 2006 also imposes the following obligations on companies:

• Companies must keep adequate accounting records (Section 386); failure to do so amounts to a criminal offence which can be punished with up to two years' imprisonment (Section 387);
• A company's accounting records must be kept at its registered office or such other place as the directors think fit, and must at all times be open to inspection by the company's officers (Section 388(1)); and
• Accounting records under Section 388 must be preserved:
• • in the case of a private company, for three years from the date on which they are made; or
  • in the case of a public company, for six years from the date on which they are made (Section 388(4)).

Additionally, the SFO will view the preservation and provision of both digital and hard-copy material as an indication of genuine cooperation on the part of a company.

4.4 Are companies obliged to report financial irregularities or actual or potential anti-corruption violations?

There is no legal requirement for companies to report financial irregularities or bribery concerns. It is nevertheless important for a company to consider whether to report those concerns to, for instance, the SFO, as self-reporting to the authorities makes it more likely that a company would be able to secure a DPA and avoid a conviction for a criminal offence. As the Joint Prosecution Guidance of the Director of the SFO and the DPP on Corporate Offending and the Deferred Prosecution Agreements Code of Practice both make clear (see paragraphs 32 and 2.8.2(i) respectively), self-reporting is a public interest factor which weighs against prosecution. In the AFWEL DPA (see question 3.6), while the judge recognised that there was no legal duty to report concerns about corruption, the proper course of conduct for the company "as a matter of ethical corporate governance was to report the known facts to the SFO". The judgment continued: "There is a moral duty on all citizens in this respect which extends at least equally to corporations."

The situation is, however, slightly different for businesses that operate in the regulated sector. Under Section 330 of the Proceeds of Crime Act 2002, it is a criminal offence to fail to make a suspicious activity report where a person knows or suspects, or has reasonable grounds to know or suspect, based on information received in the course of a business in the regulated sector, that another person is engaged in money laundering. While this relates to the failure to report concerns of money laundering (i.e., generally speaking, dealing with property which represents the proceeds of criminal conduct), it nevertheless imposes a positive obligation on those in the regulated sector to raise concerns where they have knowledge or suspicions that they are dealing with the proceeds of corruption.

FCA-regulated firms, and also those regulated by the Prudential Regulation Authority, are obliged by Principle 11 of the Principles for Businesses (Relations with Regulators) to disclose anything to the regulator which they may reasonably expect to be notified of. This would include instances where a firm came to be aware:

• that its systems or controls were not sufficient to mitigate bribery and corruption risks; or
• of actual or potential violations.

4.5 Does failure to implement an adequate anti-corruption programme constitute a regulatory and/or criminal violation in your jurisdiction?

As mentioned in question 4.1, firms that are regulated by the FCA must establish and maintain effective systems and controls to mitigate financial crime risk (which includes bribery and corruption). Failure to do so will constitute a regulatory violation.

Otherwise, failure to implement an anti-corruption programme does not amount to a criminal offence in itself; although again, the lack of an anti-corruption programme may suggest that a company does not have adequate procedures in place to prevent bribery being committed by associated persons and will mean it has no effective defence to a failure to prevent offence.

5 Enforcement

5.1 Can companies that voluntarily report anti-corruption violations or cooperate with investigations benefit from leniency in your jurisdiction?

Yes. One of the tools available to both the CPS and the SFO (although to date only utilised by the SFO) to deal with specified types of corporate offending, including offences under the Bribery Act, is a DPA. A DPA is a court-approved agreement under which the prosecution of a company is deferred for a specified period, provided that the company complies with the terms of the DPA, such as paying a financial penalty and compensation and/or putting in place a compliance programme. It ultimately requires a judicial declaration that:

• the DPA is in the interests of justice; and
• its terms are fair, reasonable and proportionate.

The Deferred Prosecution Agreements Code of Practice provides that self-reporting is a public interest factor which militates against there being a prosecution; but it also focuses on the need for the self-report to result in frank and genuine cooperation. In any event, the SFO's Corporate Co-operation Guidance states that companies must understand that cooperation does not guarantee any particular outcome. However, even where a self-report results in prosecution (as opposed to a DPA), genuine cooperation with the investigating authority will likely result in a discount on any sentence.

As an example, in the DPA between the SFO and Rolls Royce (see question 1.6), Rolls Royce was described as having provided "extraordinary" cooperation, with the judge agreeing that there should be no distinction between Rolls Royce (which did not initially self-report the conduct to the SFO) and a company which had self-reported from the outset. This was despite the underlying conduct being described as involving "egregious criminality over decades, involving countries around the world, making truly vast corrupt payments and, consequentially, even greater profits."

Similarly, in the Airbus DPA, despite what was described by the judge as a "slow start", Airbus ultimately provided exemplary cooperation, as evidenced by a multitude of factors, such as:

• reducing its use of business partners by 95%; and
• providing the investigating authorities with access to over 30.7 million documents.

Seen in this context, even if the authorities become aware of criminality without an initial self-report, the quality of the subsequent self-reporting or cooperation between the company and the authorities will be of importance when assessing what action should be taken against, or what penalties to impose upon, a company.

5.2 Can the existence of an anti-corruption compliance programme constitute a defence to charges of anti-corruption violations?

The existence of an anti-corruption compliance programme may provide a company with a defence to a charge of failure to prevent under the Bribery Act – that is, that it had adequate procedures in place. However, whether the programme is sufficient so as to amount to adequate procedures will depend on all facts and circumstances of the case.

The mere existence of a programme, even if externally validated, may still not be sufficient. For example, in the Airbus DPA, Airbus had been awarded an anti-corruption compliance certificate by a private company for the design of its anti-bribery compliance programme. However, this was clearly insufficient, as Airbus did not seek to refute the allegations of failure to prevent on the basis that it had adequate procedures in place. In the Skansen Interiors case (see question 3.4), despite there not being any anti-bribery policy, the company argued that there were adequate procedures in place for a domestic company with 30 employees, such as:

• the inclusion of anti-bribery clauses in the relevant contracts; and
• a system for approving and settling invoices requiring various levels of approval.

However, the prosecution established that there was:

• a lack of records of Skansen's compliance culture; and
• a lack of a policy prior to the arrival of the new CEO which was specific to the Bribery Act.

While the Skansen case was a jury conviction, meaning that it provides no judicial guidance as to what constitutes ‘adequate procedures', it is a useful demonstration of the importance of substance over form where policies and procedures are concerned.

5.3 What other defences are available to companies charged with anti-corruption violations?

In addition to the defence of adequate procedures for companies charged with failure to prevent, a company incorporated overseas may seek to argue that it did not carry on a business, or part of a business, in the United Kingdom, meaning that it was not subject to the Bribery Act.

It would be open to a company charged with a Section 1, 2 or 6 Bribery Act offence to argue that its senior management, who represent its directing mind and will, were not involved in the offence and therefore corporate criminal liability could not be established. A company could also argue, if charged with any of these Bribery Act offences, that the person carrying out the prohibited act or omission did not have a close connection to the United Kingdom.

5.4 Can companies negotiate a pre-trial settlement through plea bargaining, settlement agreements or similar?

A type of settlement agreement potentially open to a company is a DPA. However, it is at the discretion of either the SFO or the CPS to invite a company to enter into DPA negotiations, provided that the prosecutor is satisfied that the relevant offending meets both the evidential test (which is slightly modified for DPAs) and the public interest test. Entering into negotiations does not equate to a guarantee that a DPA will be either offered or granted by a court.

While the United Kingdom does not have the concept of plea bargaining in the same sense as the United States, it is open to a company that has been charged with criminal offences to seek to plead to lesser or alternative offences, or to even try to agree a ‘basis of plea'. This is a document which sets out the particular factual basis upon which the company would be pleading guilty and which it would be sentenced upon. If there are any material disputes about the basis of plea, a separate hearing will take place before a judge (termed a ‘Newton hearing'), at which the judge will determine, upon hearing evidence, whether the basis of plea could be accepted.

5.5 What penalties can be imposed for violations of the anti-corruption legislation? Can non-exhaustive penalties be imposed for such violations (eg, exclusion from public procurement, exclusion from entitlement to public benefits or aid, disqualification from the practice of certain commercial activities, judicial winding up)?

An individual convicted in the magistrates' court of a Section 1, 2 or 6 Bribery Act offence faces:

• up to 12 months' imprisonment; and/or
• either:
• • a fine of up to £5,000 (in respect of offences committed before 12 March 2015); or
  • an unlimited fine (in respect of offences committed after 12 March 2015).

Alternatively, if an individual is convicted of any of these offences in the crown court, he or she faces:

• up to 10 years' imprisonment; and/or
• an unlimited fine.

A company convicted of any of the same offences can face the same level of fine as an individual, whether it is convicted in the magistrates' court or the crown court (although it will be more likely for a company to face proceedings in the crown court). A company can only be prosecuted for the failure to prevent offence in the crown court, for which it can be sentenced to a fine. There are sentencing guidelines in place for dealing with companies, entitled Corporate Offenders: Fraud, Bribery and Money Laundering, which set out the process for assessing the level of fine that should be imposed.

Both convicted individuals and companies are also likely to face confiscation proceedings. These can lead to an order that the offender pay a sum of money which is the lower of either:

• the benefit obtained by or in connection with the offence; or
• the available assets of the individual/company.

Upon conviction, individuals can also be disqualified from being company directors for between two years and 15 years.

In the event of a conviction for an offence under sections 1, 2 or 6 of the Bribery Act, as a result of the Public Contract Regulations 2015, a company will be mandatorily excluded for a period of five years from bidding for public contracts. However, such a company may be able to make use of the self-cleaning provisions of the Public Contract Regulations 2015 which, if satisfied, may lead to the company not being so excluded.

If there is a conviction under section 7 of the Bribery Act for failure to prevent, there may be a discretionary right to exclude the convicted company from bidding for public contracts.

5.6 What is the statute of limitations to prosecute anti-corruption violations in your jurisdiction?

There is no statute of limitations for the prosecution of anti-corruption offences.

6 Trends and predictions

6.1 How would you describe the current anti-corruption enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The use of DPAs by the SFO (the CPS is yet to enter into any DPAs) has become a significant method of enforcing anti-corruption laws and a means of improving corporate compliance with the legislation. The SFO has entered into 12 DPAs since they came into force in 2014, relating to a mixture of both fraud and bribery offences; and it has been at pains to emphasise that since then, DPAs have delivered £1.6 billion to the public purse. This is a significant amount of money that has been recovered and it is fair to say that the DPA proceedings have led to the concerned companies being significantly changed, with a better compliance culture.

However, no individuals have yet been successfully prosecuted in cases following a DPA and in some cases no individuals have been charged at all. The House of Lords Select Committee on the Bribery Act has noted that while DPAs have proven to be an "excellent way of handling corporate bribery", they make it "all the more important" for individual defendants to be prosecuted rather than DPAs being used as an alternative to such action. This has led to criticism that individuals, and specifically senior executives, are not being held to account. This continued focus by the SFO on securing DPAs as a method of enforcing anti-corruption laws and failure to hold responsible individuals to account leads to a perception that the United Kingdom is more concerned with obtaining funds from companies.

The SFO has also regularly asserted that the law on corporate criminal liability (as explained in question 2.6) makes it difficult to prosecute companies (eg, for offences under Sections 1, 2 and 6 of the Bribery Act). One can readily understand these difficulties when one considers the challenge of identifying the directing mind and will in the complex corporate structures that exist in many large companies. In the case of anti-corruption laws, however, these concerns have been significantly alleviated by the failure to prevent offence. Nevertheless, the difficulties with corporate criminal liability remain where a company could instead fall to be prosecuted for any of the Section 1, 2 or 6 offences (and also for any pre-Bribery Act offending), although it should be noted that the SFO recently secured guilty pleas by Glencore Energy (UK) Ltd to five substantive bribery offences contrary to section 1 of the Bribery Act. The Law Commission held a consultation in 2021 on reform to corporate criminal liability and in June 2022 published an options paper. Whilst not making any recommendations, the Law Commission has detailed options for reform in its report, which variously include: extending the directing mind and will doctrine to specifically include the actions of senior management; and specific ‘failure to prevent' offences such as failing to prevent fraud committed by an employee or agent of the company.

7 Tips and traps

7.1 What are your top tips for the smooth implementation of a robust anti-corruption compliance programme and what potential sticking points would you highlight?

The smooth implementation of any compliance programme requires communication, supported by proper monitoring and review of the programme. It is important that the terms and procedures of a robust anti-corruption compliance programme are clearly and effectively communicated throughout the business. This can be best achieved by developing a zero-tolerance culture to bribery and corruption which is:

• led from the top of the company's management structure; and
• supported a person or group of people (depending on the size of the company) responsible for the oversight and management of the compliance programme.

This leads neatly to the other key requirement: that there is effective engagement with the programme, which involves active monitoring and oversight of the programme. These two key elements will together ensure that:

• there are clear reporting lines and the correct culture in place to help implement the programme; and
• any queries or issues raised by or in connection with the programme's implementation can be properly dealt with and actioned.

This will avoid allegations that a programme is simply a ‘tick the box' exercise.

Potential sticking points include a lack of communication, which could manifest itself through internal confusion as to how the programme applies in practice and/or what the reporting lines are in the event of any issues. Additionally, if the programme is not properly supported by the business – for instance, by way of staffing or funding – it is likely that staff will not be properly educated about and trained on the requirements of the programme, or know where they should direct any concerns or queries that arise from following its requirements.

It is important for any company to remember that merely having a programme – even a robust one – in place will not be enough; compliance requires ongoing monitoring and review, and organic change based on practical issues thrown up by the particular company's business operations. As the Joint Prosecution Guidance of the Director of the SFO and the DPP on Corporate Offending states, and as highlighted by the SFO's Evaluating a Corporate Compliance Programme, having a "genuinely proactive and effective" compliance programme in place is a public interest factor weighing against prosecution.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.