UK: UK Bribery Act 2010: Facts and Implications for Businesses

Last Updated: 6 February 2012
Article by Bill Jamieson and Lee Howes

The UK Bribery Act 2010 ('Bribery Act' or 'Act'), which came into force on 1 July 2011, has brought in significant changes to the UK anticorruption law, replacing the UK's previous bribery laws, and will need to be taken into account by, inter alia, individuals, businesses and prospective buyers in the context of acquisitions as well as joint venture partners when establishing a joint venture, and not just within the UK itself.

Offences under the Bribery Act

The Act extends the crime of bribery to cover all private sector transactions. Previously, bribery offences were confined to transactions involving public officials and their agents. The Act does not apply retrospectively; therefore, only corrupt conduct that takes place after it has come into force constitutes an offence under the Act.

The Bribery Act has created four separate offences:

  1. A general offence of offering, promising or giving a bribe (section 1, Bribery Act).
  2. A general offence of requesting, agreeing to receive or accepting a bribe (section 2, Bribery Act).
  3. A distinct offence of bribing a foreign public official to obtain or retain business (section 6, Bribery Act).
  4. A new strict liability offence for commercial organisations that fail to prevent bribery by those acting on their behalf (their associated persons), where the bribery was intended to obtain or retain a business advantage for the commercial organisation (section 7, Bribery Act).

For the purposes of the section 7 offence, the term "associated person" is widely defined, and will apply to people over whom an organisation has little control, such as intermediaries, agents, sub-contractors and other persons acting on its behalf. It will also cover employees, subsidiaries, contractors and suppliers that perform services for or on behalf of the organisation, and may include joint venture partners and joint venture companies where these organisations perform services for or on behalf of each other. The guidance published under section 9 of the Act (the "Guidance"), clarifies that even where an agent or subsidiary was performing services for the organisation, an offence will only be committed if that agent or subsidiary intended to obtain or retain business or an advantage in the carrying out of business for the organisation. The Guidance gives an example of where a bribe on behalf of a subsidiary by one of its employees or agents will not automatically involve liability on the part of its parent company if it cannot be shown the employee or agent intended to obtain or retain business or a business advantage for the parent company or other subsidiaries. This is the case, even if the parent company or subsidiaries benefit indirectly from the bribe.

To be guilty of a strict liability offence under section 7, an organisation does not need to be aware of the bribe, and will only have a defence if it can demonstrate that it had in place "adequate procedures" to prevent bribery. The Guidance recognises that an organisation will only have control over relationships with its contractual counterparty and not sub-contractors. The Guidance, therefore, suggests that companies adopt antibribery procedures with their contractual counterparty and ask that counterparty to adopt a similar approach with the next party in the chain.

Senior officers (which includes directors, company secretaries and senior managers) of a body corporate can also be convicted of an offence under the Act where they are deemed to have given their consent or connivance to giving or receiving a bribe or bribing a foreign public official (section 14, Bribery Act). This would likely include omitting to act to prevent bribery. However, senior officers cannot be held personally liable for an organisation's failure to prevent bribery under section 7 of the Act.


The Act has significant extra-territorial reach. Sections 1, 2 and 6 apply to acts or omissions that take place in the UK, and also capture bribery that takes place outside the UK (which would constitute an offence if carried out in the UK) where the person offering, etc., the bribe has a "close connection" with the UK (for example, where a company is incorporated under the law of any part of the UK or is resident in the UK) (section 12).

The section 7 offence applies to bodies incorporated in the UK or carrying on a business, or part of a business, in the UK, regardless of where the bribery takes place. As a result, the section 7 offence will apply to overseas companies with only a minor presence in the UK. There is no requirement for the 'associated person' to have any connection with the UK. Whether organisations formed outside the UK carry on a business in the UK will be determined by the courts. However, the UK Government would not expect, for instance, that the mere fact that a company is admitted to the UKLA's Official List and to trading on the London Stock Exchange will qualify it as carrying on a business in the UK. Similarly, having a UK subsidiary alone would not be expected to comprise carrying on a business, because the subsidiary can act independently of its parent company. To reiterate, it seems that only where a subsidiary is giving or taking a bribe on behalf of its parent or similar such conduct, will the parent be implicated.


The potential consequences of being convicted of a bribery offence include criminal penalties for both individuals and companies. Companies can receive an unlimited fine, and individuals face up to ten years imprisonment and/or an unlimited fine on conviction.

Fines for companies are likely to be heavy. A recent judgment in the Crown Court, against a company that had bribed foreign public officials, stated that fines for corruption should be in the tens of millions of pounds or more (R v Innospec [2010]: as per Lord Justice Thomas).

A director convicted of a bribery offence is also likely to be disqualified from holding a position as a director for up to 15 years.

Ways to avoid breaching the Act

The Serious Fraud Office published guidance on its approach to prosecutorial decision making under the Act, which is useful for companies conducting a risk assessment on how prone they are to infringing the Act, the likelihood of being prosecuted if they do and what they can do to minimise the risk. Suggested areas for implementation of procedures include: internal auditing of all business locations at regular intervals; rapid investigation of alleged breaches of policies; review of employment contracts to ensure that the organisation's position is protected in the event of a breach by an employee; and due diligence on business partners and contracts.

Risks for a purchaser

Although a purchaser will not be liable for corrupt acts of the target company, or relating to the target business, that took place before the acquisition (the Bribery Act does not have a concept of successor liability), there are risks for a purchaser acquiring a business which has potentially been involved in corrupt practices, such as future prosecution of the target company and loss of value, reputation and revenue.

If corruption continues to take place after completion, the purchaser could also face liability under section 7 of the Act for failure to prevent bribery (subject to the adequate procedures defence).

Thorough due diligence to identify risks is therefore essential and appropriate warranties and conditions should be inserted into the sale and purchase agreement; a price adjustment and exclusion of 'tainted' assets should be considered where appropriate.

Bribery Act v US Foreign Corrupt Practices Act (FCPA) – How do they measure up?

Although the Bribery Act is similar in many respects to the existing anti-bribery provisions of the FCPA, overall, the Bribery Act is considered to be broader and more robust than the FCPA. The main differences are as follows:

  1. Private/Public – The FCPA focuses on acts of bribery relating to foreign governmental officials, whereas the Bribery Act is further reaching as it covers any form of bribery, i.e., bribery of private individuals as well as public officials.
  2. Receipt of Bribes – The Bribery Act not only bans the actual or attempted bribery of private individuals and public officials but also prohibits the receipt of bribes. The FCPA contains no such provision.
  3. Corporate Offence – The Bribery Act creates a strict liability offence of failing to prevent bribery. Under the Bribery Act, companies will be liable if anyone acting under its authority commits a bribery offence. Such persons can include employees, consultants, agents, subsidiaries and joint venture partners. The only defence is where a company has adequate procedures in place to prevent bribery offences. The FCPA does not contain any strict liability offences. This corporate offence has extraterritorial application and applies not only to UK corporate entities, but also to overseas companies who carry on business in the UK (even where it may do so in limited circumstances, which would include through a branch or representative agent or office).
  4. Criminal Penalties – The Bribery Act has more severe criminal penalties than the FCPA. Whilst the Bribery Act allows UK prosecutors to impose an unlimited fine and a prison sentence of up to 10 years, the FCPA provides for company fines of up to $2 million per violation of the FCPA and fines of up to $250,000 on individuals per violation, as well as up to 5 years imprisonment. With wilful violations of the Books and Records and Internal Control provisions resulting in fines to companies of up to $25 million and imprisonment of up to 20 years for individuals, the US provisions are, nevertheless, severe.
  5. Facilitation Payments – The FCPA has a specific exception for low level facilitation payments where payments are made which are lawful under written law of the local country or reasonable and bona fide expenditures relating to a contract. The Bribery Act has no such exception.

Action points for businesses with connections to the UK

The following should be borne in mind by businesses which have dealings with the UK:

  1. Businesses should not assume that existing anti-corruption policies will be wholly sufficient for the Bribery Act. Any business with a connection to the UK needs to revisit its anti-corruption policy in light of the Act.
  2. Businesses should start with a risk assessment to identify any vulnerable aspects of the business which could fall foul of the Act.
  3. Particular issues to bear in mind if a business has a business presence in the UK further include:
    • the need for adequate procedures;
    • an anti-corruption policy needs to address risks of bribery in the private sector (as well as the public sector);
    • a policy must address the receipt of bribes as well as payment of bribes; vfacilitation payments cannot be permitted;
    • the need for controls over "associated persons" – ask contractors to implement anti-bribery procedures with their sub-contractors and so on.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Nishimura & Asahi
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Nishimura & Asahi
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions