The FCPA vs the Bribery Bill: US multinationals can’t just focus on the FCPA

There is a collective focus on anti-corruption measures being taken across the world. The [US] FCPA enforcement actions have significantly increased over the past few years and we don’t see them letting up. As the much anticipated UK Bribery Bill is due to become law in May 2010, we expect to see a rise of enforcement actions stem from this. As is the case with the FCPA, the Bribery Bill will significantly impact the way in which companies with a nexus to the UK conduct their international business. It is important to note, however, that the Bribery Bill does not mirror the provisions of the FCPA and is actually considerably more robust.

We have come across a very useful article by Thomas Fox – “Proposed UK Bribery Bill: Its Implications and Contrasts to the FCPA,” (find it here) that sets out the differences between the Bribery Bill and the FCPA. The Bribery Bill simplifies the law on corruption and makes the UK compliant with its international obligations under the OECD. The Bribery Bill is significantly broader than the FCPA – it has stricter scrutiny and enhanced criminal penalties. The article continues to summarize the major differences between the Bribery Bill and the FCPA:

• The FCPA focuses on anti-corruption of foreign governmental officials where the Bribery Bill covers non-governmental officials (i.e., private citizens). The Bribery Bill makes any bribery illegal; not just bribing (or attempt thereof) a foreign governmental official.
• The FCPA has a facilitation payments defense where the Bribery Bill does not. Under the Bribery Bill, certain types of corporate hospitality are prohibited if they are “intended to subvert the duties of good faith or impartiality that the recipient owes his or her employer”.
• The FCPA has no strict liability either written directly into the statute or interpreted by judicial review. The Bribery Bill creates a new strict liability of corporate offense for the failure of a corporate official to prevent bribery.
• The FCPA has criminal penalties of 5 years per offense. The Bribery Bill has penalties of up to 10 years per offense.

Although there are important differences between the FCPA and the Bribery Bill, what will be equally important is how the regulators will handle enforcement, as well as settlement for offenses. As the article points out, the Bribery Bill is significantly stronger than the FCPA. US companies with UK offices (or who employ UK citizens) will be responsible for complying with not only the FCPA, but the Bribery Bill as well. To this, these US companies will have to revise their FCPA compliance programs to take into account the Bribery Bill provisions. If this anti-corruption legislation trend continues, internationally operating companies will have to account for every applicable anti-corruption provision to ensure they are conducting their business in accordance with all the laws, not just those in their home country.