Facilitation payments, Long arm jurisdiction - are you subject to the law? - Written by on Tuesday, March 1, 2011 16:54 - 0 Comments

Prosecuting overseas corporates will be a top priority for the SFO

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We recently asked Richard Alderman, Director of the SFO, some questions.

Long arm jurisdiction

In particular we were keen to answer the question about the long arm jurisdiction of the Bribery Act and its impact on overseas corporates against a backdrop of commentary that the SFO will focus on domestic corruption.  We wrote about this recently on the FCPA Blog highlighting our view that the SFO will target overseas corporates.

Below we publish our question and Mr. Alderman’s answer to that question.

Overseas corporates should pay attention.  The SFO has thrown down the gauntlet: the SFO will be targeting cases involving overseas corporates as a top priority.

thebriberyact.com, Question:

In spite of the on paper broad long arm jurisdiction of the Bribery Act there has been some speculation among commentators that it is unlikely that the SFO will target overseas businesses. For example, we recently read (in an article written by a former US prosecutor) that it was thought: (a) the SFO will initially enforce conservatively only against UK-based companies; and (b) that prosecution of overseas companies for conduct overseas is unlikely for two reasons, first, political and precedent reasons and second, such a prosecution would raise political concerns and the SFO recognizes that the last issue it needs to contend with is political inquiries.

Meanwhile in the UK there is much discussion about how the Bribery Act will make UK PLC uncompetitive.

Will the SFO enforce against overseas business?

Richard Alderman, Answer:

I do not agree with the views expressed by the former US prosecutor that are quoted in this question. I have made it clear that the new extended jurisdiction in respect of foreign corporates is very important to the SFO. This creates a level playing field and enables us to support ethical UK corporates who have been undermined by foreign corporates who use bribery to obtain a business advantage. I will be looking to see whether there is evidence of this and whether the jurisdiction test of carrying on business in the UK is satisfied. Finding cases of this nature will be a high priority for the SFO.

thebriberyact.com comment

We have never been in doubt that the SFO will target overseas corporates as a high priority using the long arm jurisdiction of the Bribery Act.  A key question will be whether the definition of carrying on business in the UK under the Bribery Act is satisfied.  We wrote about this recently.  In summary while we (and the SFO) expect the courts will be likely to adopt a low threshold to meet this criteria we do consider that there are arguments to be run.

Will an overseas corporate be prepared to defend on the basis it does not consider that it does carry on business in the UK?  Time will tell.

Tomorrow: We ask Richard Alderman about facilitation payments.

Will the SFO prosecute an overseas company which takes advantage of the FCPA facilitation payment exemption for the same payments under the UK Bribery Act? Find out tomorrow.

Save the date: March 30

Want to learn more about the Bribery Act and its application? Save the date for March 30 when we shall be running another webinar where we shall interview Vivian Robinson QC, General Counsel of the UK SFO about the Bribery Act and importantly focus on avoiding prosecution for both corporates, directors and officers.

We shall also be taking a look at the new guidance and looking in particular at corporate hospitality and facilitation payments: assuming that it has been published at the time of the webinar! Stay tuned for details.

Image © Crown Copyright 2011

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