The Legal Implications of Bribery: Cases and Consequences

The Bribery Act 2010 came into force on 1 July 2011. The Act makes it an offence for a UK national or person located in the UK to pay or receive a bribe, either directly or indirectly. 

The Bribery Act applies to:

• UK nationals.
• Foreign nationals resident in the UK.
• UK companies.
• Foreign companies who are doing business in the UK.

Understanding the legal implications of bribery is important for many reasons, as it helps individuals, businesses and societies maintain ethical standards and promote equal, fair, transparent and accountable practices. Several international initiatives and agreements, such as the United Nations Convention against Corruption (UNCAC) and the Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention, aim to combat corruption and bribery on a global level. 

What Constitutes Bribery?

Bribery is defined as “giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so.” Offering, promising, giving, accepting or soliciting for an advantage for an action which is illegal, unethical or a breach of trust, would likely be considered a bribe. This can take the form of money, gifts, loans, taxes, donations, favours, rewards or other advantages. When a person offers, promises or gives a bribe to another, this is called active bribery. When a person requests, receives or accepts a bribe, this is called passive bribery.

An organisation could be liable if a senior person in the organisation, for example a managing director, commits a bribery offence. This person’s activities would then be attributed to the organisation.

Bribery is considered harmful and is illegal for several reasons, including:

• It promotes corruption and an unfair advantage – bribery involves offering, giving, receiving or soliciting something of value with the intent to influence the actions of a person in a position of trust. This can lead to an unfair advantage for those involved in bribery, compromising fair processes, decisions and transactions. It also means that people and companies who do not engage in bribery are automatically at a disadvantage.
• Makes competition unfair – bribery can distort fair competition by giving certain companies or people an unfair advantage. This undermines the principles of a level playing field and can lead to market inefficiencies.
• It can undermine trust in institutions – bribery negatively impacts on public trust in institutions, as it implies that decisions are being made not based on merit, but on personal gain. This can also have a negative effect on the public’s confidence in government, businesses and other organisations.
• Puts ethical standards into question – bribery contributes to a culture of corruption and erodes ethical standards within society. If bribery becomes normalised, ethical behaviour in various aspects of life can be put into question.
• It can impact on economic development – countries and regions with high levels of bribery and corruption often experience slower economic development. Investors may not be willing to invest, and resources may be misallocated.

Real World Cases

There have been a number of high-profile bribery cases. 

One example is Glencore Energy UK Ltd. They were ordered to pay £280,965,092.95 after a Serious Fraud Office (SFO) investigation revealed that it paid US $29 million in bribes to gain preferential access to oil in Africa. Glencore pleaded guilty in June 2022 to seven counts of bribery. The conviction includes the first ever use of substantive bribery offences for a company. This means that senior employees at Glencore actually authorised the bribery instead of just failing to prevent it. 

The judge in the case, Mr Justice Fraser, stated in his judgment that “the facts demonstrate not only significant criminality but sophisticated devices to disguise it” before sentencing them to pay a financial penalty in response to the seven charges of bribery. He said that they “represent sophisticated offending that was sustained over prolonged periods of time”. This case was the first time since the introduction of the Bribery Act 2010 that a corporation was convicted for the active authorisation of bribery. 

In 2017, Rolls-Royce, a major British engineering company, faced a bribery scandal which related to its business activities in various countries, including Indonesia, Thailand, India, Russia, Nigeria and China. Ultimately Rolls-Royce agreed to pay approximately £671 million in order to settle the bribery allegation. 

Another example is BAE Systems, a major British defence contractor that faced allegations of corruption and bribery in relation to contracts in several countries, including Saudi Arabia, Tanzania and the Czech Republic. In 2010, BAE Systems reached a settlement with authorities, agreeing to pay fines of more than £286 million to authorities in the UK, the United States and Brazil. 

Also, the FBI and IRS coordinated with police agencies and diplomats in 33 countries in order to uncover a widespread international case of bribery and kickbacks, all linked to FIFA officials. Officials were arrested in Switzerland and extradited to the United States, where they were charged with wire fraud, racketeering and money laundering. The Justice Department documented more than $150 million in bribes and kickbacks that had been paid to FIFA officials. The investigation found evidence of bribery dating back to the 1990s. Sixteen more officials were charged for their involvement in the scheme, along with two other officials who surrendered. 

Legal Framework in the UK

Bribery in the UK is primarily governed by the Bribery Act 2010. The Bribery Act addresses both domestic and foreign bribery, making it an offence for individuals and organisations to engage in bribery. The Act criminalises various offences which relate to bribery. This includes offering, promising, giving, requesting, agreeing, receiving and accepting bribes. It applies to both the public and private sectors. 

There are two different types of bribery defined in the Act. Active bribery, which is offering, promising or giving a bribe, and passive bribery, which is requesting, agreeing to receive or accepting a bribe. The Act applies to UK nationals, residents and companies incorporated in the UK. This applies regardless of where the bribery offence occurs. The Act makes companies liable for failing to prevent bribery from occurring within their organisation. Companies can be held criminally liable unless they can prove that they had sufficient procedures in place in order to prevent bribery. The Bribery Act also works hard to align with international anti-bribery efforts, such as the OECD Anti-Bribery Convention, which reinforces the commitment to tackling bribery on a global scale.

Guidance is provided in the Bribery Act in order to assist companies in establishing effective anti-bribery policies and controls. The Act sets out reporting obligations and encourages the reporting of bribery-related concerns. Individuals and organisations are encouraged to report suspected offences. 

The Serious Fraud Office (SFO) has published various policies and internal guidance documents for investigators and prosecutors who are considering bribery offences. 

Consequences of Bribery

Bribery is a criminal offence in the United Kingdom, and there are several consequences for individuals and organisations involved in bribery. The Serious Fraud Office is the primary agency responsible for investigating and prosecuting bribery offences in the UK. They are part of the UK criminal justice system covering England, Wales and Northern Ireland. The SFO is a specialist prosecuting authority that is responsible for investigating the most serious or complex fraud, bribery and corruption. The SFO was created and given its powers under the Criminal Justice Act 1987. Investigations of high value bribery or complex overseas bribery will be investigated by the SFO. In other cases, investigations may be undertaken by the National Crime Agency or local police force if it is on a much lesser scale.

People and organisations found guilty of offering, giving, receiving or requesting bribes can face significant penalties, including imprisonment and fines. Companies found guilty of corporate offences may be subject to unlimited fines.

Some of the potential consequences of bribery include:

• Fines.
• Imprisonment.
• Individual penalties.
• Corporate penalties.
• Director liability.
• Damage to reputation.
• Employee retention issues.

Preventing Bribery

The Bribery Act 2010 provides a comprehensive legal framework in order to combat bribery and corruption. This legislation ensures strong anti-bribery efforts in the UK. The Act contains five key offences:

• Active bribery – offering to or giving a bribe to another. An advantage offered to get the recipient to do something improper.
• Passive bribery – accepting or requesting a bribe. An advantage accepted for carrying out a function improperly.
• Bribery of a foreign (non-UK) public official – an advantage intended to influence a public official in order to help your business in any way.
• Consent or connivance – by a director or senior company officer in bribery by a company.
• Failure by a commercial organisation – involves failure to prevent bribery on its behalf by its associated persons.

Organisations should carefully consider the statutory and other relevant guidance when they are making and reviewing their internal compliance on bribery. Getting legal advice when doing so is recommended.  

You should have an anti-bribery policy if there is a risk that someone who works for you or on your behalf might be exposed to bribery.

An anti-bribery policy should be sufficient for the level of risk the business faces. Your policy should include:

• Your approach to reducing the risks of bribery.
• Rules about accepting gifts, hospitality or donations.
• Guidance on how to conduct your business deals.
• Rules on avoiding conflicts of interest.
• Guidance on what will happen if bribery is suspected.

You should ensure that your staff are aware and understand the policy and consider having it as part of your staff induction. You should also regularly review and update the policy.

Conclusion

Bribery has such a profound impact on societies, economies and the rule of law. Bribery not only negatively impacts on fair competition and undermines the principles of justice, but it also erodes public trust in institutions. There is a legal framework aimed at combating bribery that reflects a global commitment to fostering transparency and accountability. Legislative measures, such as the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, have played a crucial role in addressing the issue of bribery, the enforcement of law and international standards and cooperation.

It is important that companies and governments alike invest in preventative measures and robust compliance programmes in order to create an environment where bribery is culturally unacceptable as well as being punishable by law. Efforts on both national and global levels are important so that we can mitigate the effects of bribery and pave the way for a fairer future for all. 

A whistle-blower in the context of bribery refers to someone who exposes or reveals information about bribery or corrupt practices within an organisation or government. Whistle-blowers play an important role in uncovering and reporting cases of bribery. They may be employees, contractors or people with insider information about what has been going on. The UK has whistle-blower protection laws in place in order to encourage people to report wrongdoing in the workplace without fear of retaliation. 

The Public Interest Disclosure Act 1998 (PIDA) is important legislation which provides protection to whistle-blowers in the UK. This law protects employees who disclose information about certain types of wrongdoing, which are known as qualifying disclosures, from unfair treatment or from losing their jobs. The whistle-blower must reasonably believe that the disclosure is in the public interest and is either:

• a criminal offence;
• a failure to comply with legal obligations;
• a miscarriage of justice;
• endangering health and safety;
• creating damage to the environment; or
• attempts to cover up any of the above issues.

If you have concerns about bribery, you should report these to the National Crime Agency (NCA). Allegations of bribery and corruption involving UK companies, or foreign companies or people with a connection to the UK, should be reported to the International Corruption Unit. You can report bribery and corruption to the NCA rather than to your employer and you will still be protected by employment law. You should include as much information as possible about your concerns. This will enable them to investigate the allegation as quickly and thoroughly as possible.

You should submit your information to communication@nca.gov.uk