International - Written by on Monday, August 1, 2011 23:41 - 2 Comments

Don’t know if you’re carrying on business in the UK, or not? What do you do?

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We have highlighted before that we consider that the long arm application of the Bribery Act is ripe for litigation.

The key to its long arm jurisdiction rests in its application to any organisation which can be said to carry on part of a business in the UK.

The Bribery Act does not elaborate on what carrying on business equates to and it remains one of our most frequently asked questions.

The Ministry of Justice guidance hinted that subsidiary companies would not be enough to bring a parent organisation within the ambit of the Bribery Act:

“…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.” [our emphasis]

On the other hand Richard Alderman, Director of the SFO, said this after the publication of the guidance on the subject of subsidiaries:

“Many have asked, over the last few months, about whether having a subsidiary in the UK is sufficient to enable the test to be satisfied. We have certainly had discussions in the SFO with a number of corporations based in the US and in other countries and, of course, the position becomes particularly complex where business structures operate under wholly different systems of law. We have to look at the simple test in the Bribery Act and ask whether or not that foreign corporation is carrying on business here. If it is, then corruption that it commits anywhere else in the world is within our jurisdiction…

…it is right for us to probe this in appropriate cases. We shall want to see whether or not the subsidiary is operating in that way. I think it right for us to look at that. If the guidance is satisfied and the subsidiary is operating wholly independently, then there will be no foreign company exposure to the Bribery Act.”

The position is uncertain.

What are organisations to do?

One option is to take the view that an organisation is not carrying on business in the UK and that the Bribery Act does not apply.

There is an obvious risk with this approach.

Another approach is to take the position that the Bribery Act applies and upgrade Anti-Bribery and Corruption policies accordingly.

Did anyone spot a flaw in our last sentence?

The devil, as ever, is in the detail.

We’ve noticed that some standard policies and procedures  assume the application of the Bribery Act.

If you are a company that *might* be subject to the Bribery Act do you really want to sell the pass on its jurisdiction?

Personally, we prefer it if, in appropriate cases, the argument is kept up our sleeve.

So we recommend inserting wording along the lines that an overseas organisation has taken the decision to adopt anti-bribery procedures that are up to the standard of Bribery Act compliance without conceding the Bribery Act applies.

Just in case…

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Weekly Roundup | i-Sight Investigation Software Blog
Aug 5, 2011 5:02

[…] Don’t know if you’re carrying on business in the UK, or not? What do you do?: Richard and Barry, thebriberyact.com, discusses the fact that the Bribery Act does not elaborate on what carrying on business in the UK equates to and how it remains one of their most frequently asked questions. […]

Compliance Bits and Pieces for August 5 | Compliance Building
Aug 5, 2011 5:02

[…] Don’t know if you’re carrying on business in the UK, or not? What do you do? in The Bribery Act .com […]

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