International - Written by on Monday, March 5, 2012 16:03 - 0 Comments

International organisations, the Bribery Act & the UK public interest in prosecution

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We are frequently asked about the exposure of overseas parented corporations and businesses.

Under the Bribery Act there is potential jurisdiction in connection with Bribery Act in relation to any business which carries on business or part of a business in the UK.

There has been a lot of commentary on this.  A strong business lobby before the final guidance on Adequate Procedures (the defence under section 7) came out achieved a couple of ‘concessions’ on the long arm jurisdiction of the Act.

For example, broadly speaking, the guidance highlighted that having a UK subsidiary or obtaining a listing on the London Stock Exchange should not, in themselves, create jurisdiction under the Bribery Act.  In reality the first example is, in theory, more understandable than the second.   The idea that a company with a listing on a UK exchange but is not subject to the Bribery Act is in stark contrast to the United States which takes the view that if a company is selling its shares on a US market it is automatically subject to the US Foreign Corrupt Practices Act.

Either way, we know the SFO view is that it is extremely unlikely that the UK connection will be so limited .  A UK subsidiary will have directors from the parent, probably share treasury function and receive strategic, if not weekly and daily input from elsewhere in the group the SFO will likely argue.  A company with a UK listing may have UK bank accounts, non executive directors who are resident in the UK, representative offices and other connections with the UK the SFO will say.

In summary, the SFO take the view that on analysis there will be many more links with the UK which will provide it with jurisdiction *if* it wishes to pursue a Bribery Act investigation.

This will of course be question for the courts to decide (something which the UK government and the SFO agree on).  On the other side, we are keen make the case that such a foreign company is not carrying on business in the UK.  Bring it on…

Likewise, the SFO is on record as keen to test the limits of its jurisdiction in appropriate cases and has been criticised for failure to heed the direction of the government guidance.

And yet.  However the *if* is a big *if*.

The SFO has been vocal about circumstances where it has jurisdiction but will not take action (though there has been a lot less coverage of this).

Put another way, the SFO has been clear about cases where there is jurisdiction under the Bribery Act and suspected bribery but the UK public interest does not justify (and tax payers money should not be spent on) an investigation.  We agree on this.

The SFO Director, Richard Alderman, confirmed the likely SFO view in such cases recently saying:

“…we are actively looking at foreign corporations who have some business here and who are engaged in bribery in other countries.  We have identified a few cases already, but have decided not to take further action because no UK company was disadvantaged.  Although technically we had jurisdiction, it seemed to the SFO that our resources would be better employed on those cases where there is a clear UK aspect.  We have found some other cases where there is a potential UK aspect and we are looking at these to see whether or not we should be starting a full formal investigation.”


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