8 SPAIN: More Shareholder Democracy? • 8 ITALY: Privacy Please • 9 CENTRAL AND EASTERN
EUROPE: Private Equity Revives • 10 BRUSSELS: Sizing Up the New Competition Commissioner •
11 Lateral Moves
ILLUSTRATIONS BY WILLIAM L. BROWN
UNITED KINGDOM
Britain’s Tough New Antibribery Law
Only a short grace period re- mains for foreign companies with operations in Britain to
get their houses in order before a tough
new Bribery Act goes into effect that is
even more far-reaching than its U.S.
equivalent, the Foreign Corrupt Practices Act (FCPA).
The Bribery Act, which took almost
ten years to get through Parliament
to replace outdated laws, was a
response to criticism from the Organization for Economic Co-operation and Development, which in
turn was pressured by the United
States. Britain’s reputation in anticorruption efforts took a further
beating in 2006, when its Serious
Fraud Office (SFO), under government pressure, halted an investigation into a BAE Systems plc arms
deal involving alleged payments
to a Saudi government official. (In
February the SFO ended a related
investigation after BAE agreed to
pay £ 30 million for failing to keep
accounting records of payments to
an adviser in Tanzania.)
The new U.K. legislation has
more bite than the FCPA in many
ways, notes Michael Barta, a Baker
Botts partner in Washington, D.C.
Unlike the FCPA, it applies to
commercial bribery, not just payments to foreign officials. It also
bars “facilitation payments” to officials
intended to speed up routine transactions, which are allowed by the FCPA.
The U.K. law also has a sweeping purview. Its prohibitions against bribing another person, accepting a bribe, or bribing a foreign public official can be applied
to any person with “a close connection”
to the United Kingdom, including a business incorporated in the country, even if
the alleged crime itself occurred outside
the U.K. A fourth offense, failure to prevent bribery, could affect companies that
carry on any part of their business in the
U.K., whether the briber is an employee,
an agent, or a subsidiary.
The only defense to this last charge
is whether a company has in place “ad-
equate procedures” to prevent bribery.
The vagueness of this standard worries
many U.K. and foreign companies. The
SFO has listed some elements that it will
consider in evaluating whether a com-
pany has adequate procedures in place.
But uncertainty remains because the
in the U.K., had reached the first-ever
“global settlement” in concurrent cor-
ruption investigations by the U.S. De-
partment of Justice and the SFO, agree-
ing to pay $14.1 million to the United
States and $12.7 million to the U.K. The
judge reluctantly approved the settle-
ment. However, he warned, “This court
must and will sentence in the way set
out in the law. A suggested agreed-
sentence is not only impermissible,
it can raise false hopes.”
Indeed, the same court in April
ignored the SFO’s recommenda-
tion of a suspended sentence for
Robert Dougall, an executive with
De Puy International Ltd., who had
cooperated fully with the agency,
and sentenced him to 12 months
in prison for enabling corrupt pay-
ments through a Greek intermedi-
ary. On appeal, Lord Chief Justice
Judge suspended Dougall’s sen-
tence but warned that defendants
should not expect a better outcome
in exchange for cooperation.
“The situation is still in flux,”
comments Omar Qureshi, a CMS
Cameron McKenna partner who
is not involved in the Dougall or
Innospec cases. “My advice in the
abstract is to watch this space, be-
cause there will be developments.
But actually advising a client
whether to self-report is difficult.”
The act is expected to go into effect
in the fall. Meanwhile, companies would
do well to heed the advice of Eversheds
partner Neill Blundell, who predicts in-
creasing cooperation between the SFO
and the Justice Department, as in the
BAE and Innospec cases. If a company
is under investigation by one agency, the
other is likely to try to get a piece of the
action as well, Blundell says. Amid these
risks, the lawyers interviewed offered
uniform advice: Companies must focus
on getting anticorruption procedures
and policies in place, and provide com-
pliance training at all levels.
—Philippa Maister
A new law encourages companies
to “self-report” in exchange for
leniency. Will judges go along?
government has not issued formal guidance, according to DLA Piper U.K. partner Jonathan Pickworth.
The SFO encourages companies to
“self-report” any instances of bribery or
corruption, holding out the possibility of
a civil action instead of a criminal pros-
ecution “as well as the opportunity to
manage, with us, the issues and any pub-
licity proactively.”
However, in March, Southwark
Crown Court’s Lord Justice Thomas, in
a corruption case against Innospec Ltd,
concluded that the SFO had no author-
ity to strike this kind of deal. Innospec,
a Delaware corporation headquartered
