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FCPA and UK Bribery Act Mandate implications

One of the purposes of the Copenhagen Charter is to establish a culture that makes it hard for fraud and corruption to happen.

FCPA compliance doesn't mean you are automatically UK Bribery Act (BA) compliant and vice versa. FCPA is from 1977 with one revision and the UK Bribery Act has been 15 years in the making and effective April 2011. Both acts, if implemented incorrectly could scare growth and opportunities for companies involved in cross-border business activities.

Both Acts make it unlawful for a company, its employees, directors/ officers, and agents to make a corrupt payment or give anything of value to a person for the purpose of obtaining or retaining business. FCPA focuses on Corruption and BA focuses on bribery and is probably the strictest anti-bribery law to-date. Here are some of the common elements in spite of their differences:

The following events are considered punishable offences under both Acts:
  1. Give a bribe to anyone.
  2. Receive a bribe.
  3. Bribe a public official- influence the official, gain business/contracts.
  4. Officers who consent or connive are liable.
  5. Failure to prevent bribery.

Therefore it is vital that companies avoid reputational damages and debarrement from bidding on certain procurement contracts. Stipulations relate to the following:
  • Individual Liability. Individuals are held accountable for their actions. There are 3 primary offences: giving a bribe, receiving a bribe and bribing a foreign public official.
    • The tendency is increased enforcement actions against individuals. The regulatory agencies have the authority to enforce the acts against a broad range of individuals including officers and employees within a company
    • Outside individuals acting on behalf of a company.
    • This level of activity will continue as enforcement authorities pursue both companies and the executives involved in improper payments.
  • Corporate Liability. It's an offence if a company fails to prevent bribery – very broad, causes the most international concern. All corporations must secure proper guidance on the adequate procedures for preventing bribery and monitor the implementation and progress.
    • Any and all companies or organizations who conduct business regardless of size, revenue, or industry sector
    • The FCPA defines the term foreign official to include any officer or employee of a foreign government or any department, agency, or instrumentality thereof [...] or any person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality.
  • Consenting Officers. Any senior officer of a company (with close ties to USA and UK) will be guilty of the same offence committed if they fail to demonstrate that they took action once they were aware of the delinquency.

It is vital that adequate procedures in place, are well documented, are monitored and tested for compliance.

Facilitation payments. Gold standard is zero tolerance. If you feel that reasonable expenditure to establish relationships is part of doing business and tolerate such incidents, then there has to be clear stipulations that define both terms to cover all eventualities. The nature and place business is done has also to be taken into consideration. Make sure that these situations are not part of an organized scheme. Employee security issues and other one off circumstances and scenarios have to be defined and documented.

Corporate hospitality. Define and document the degree of the gift, hospitality and other expenses in order to have a clear understanding and not complicating the matter, based on the circumstances surrounding the particular activity. High and generous expenditure will probably be considered as an attempt to influence a business leader's decision. That's illegal.

Avoid entering grey areas. In case of doubt it is better to report the incident. Both acts have initiated cross-border cooperation involving several countries.