Anti-Corruption 2023 Comparisons

The UK is a signatory of the United Nations Convention against Corruption, which is the only legally binding universal anti-corruption instrument.

The UK is also signed up to the Organisation for Economic Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the OECD Convention), which focuses on the "supply side" of bribery.

Furthermore, despite its departure from the European Union, the UK remains a party to the Council of Europe's Criminal Law Convention on Corruption, and the EU Convention against Corruption involving Officials.

The Bribery Act 2010 is the main statute for corruption offences by individuals or companies.

In contrast to the US Foreign Corrupt Practices Act 1977 (FCPA), the Bribery Act covers bribery in both the private and public sectors, and prohibits any facilitation payments. The Bribery Act is often described as the leading global standard for anti-corruption law and is therefore important to multinational companies.

Since the Bribery Act became law, other reforms include the introduction of Deferred Prosecution Agreements (DPAs) (through the Serious Crime and Courts Act 2013) and a series of aggressive enforcement actions against corporates. To date, the Serious Fraud Office (SFO) has secured 12 DPAs.

The most significant feature of the current framework is the strict liability corporate offence of failure to prevent bribery (Section 7 of the Bribery Act). This represented a break from tradition in English law, which had only imposed criminal liability on corporates where it could be shown that the organisation’s directors or senior management knew of the criminal conduct at the relevant time.

Typically, investigations into bribery interact with the money laundering regime, which is governed by the Proceeds of Crime Act 2002 (POCA). Any benefit flowing from a bribe is likely to constitute "criminal property" under POCA; consequently, any company or individual dealing with the proceeds of bribery may be exposed under POCA. Those engaged in the regulated sector – including financial services firms, accountants and lawyers – have onerous obligations and direct liability under POCA as they must report known or suspected money laundering by third parties; failure to do so is itself a criminal offence. Individuals in the regulated sector may be convicted under POCA even where they did not subjectively suspect money laundering but where, objectively, they had reasonable grounds for doing so.

The Criminal Finances Act 2017 created additional powers to investigate potential proceeds of crime, including the introduction of the unexplained wealth order (UWO) regime (see 8.2 Likely Changes to the Applicable Legislation of the Enforcement Body) and additional civil powers to recover proceeds of crime. It also extended UK anti-money laundering laws to tackle terrorist funding, and created corporate offences for facilitating tax evasion.

Bribery cases often also involve subsidiary issues regarding fraud (Fraud Act 2006), common law conspiracy to defraud and/or false accounting (Theft Act 1968).

The key guidance is as follows:

• the Bribery Act 2010: Guidance about Procedures which Relevant Commercial Organisations can put into Place to Prevent Persons Associated with them from Bribing (Section 9 of The Bribery Act 2010), published by the Ministry of Justice in March 2011 (the MoJ Guidance);
• the Bribery Act 2010: Joint Prosecution Guidance of The Director of The Serious Fraud Office and The Director of Public Prosecutions, published March 2011 (the Joint Prosecution Guidance);
• the Code for Crown Prosecutors, October 2018;
• the Sentencing Council Fraud, Bribery and Money Laundering Offences: Definitive Guideline, effective 1 October 2014; and
• the SFO/DPP Joint Guidance on Corporate Prosecutions and the Deferred Prosecution Agreements Code of Practice: Crime and Courts Act 2013, published 2014 (the DPA Code of Practice).

In April 2021, the UK implemented the Global Anti-Corruption Sanctions Regulations 2021. The new sanctions regime was foreshadowed by the UK Anti-Corruption Plan 2017–2022. Specifically, the Regulations enable the UK government to impose asset freezes and travel bans on individuals and entities determined to have committed, or to have been involved in, serious corruption – specifically the bribing or misappropriation of property from a foreign public official, or benefiting from such bribery and misappropriation. To date, sanctions under this regime have been imposed on 27 individuals from Russia, South Africa, India and a number of South American nations.

More recently, the Economic Crime (Transparency and Enforcement) Act 2022 (Economic Crime Act) received royal assent in March 2022 and introduced registration and information requirements for overseas entities buying or holding UK property, in an effort to improve the transparency of UK property ownership and to deter criminals seeking to launder and hide proceeds of crime within the UK. It also updated the financial sanctions and UWO regimes.

The UK government has also recently published its proposed Economic Crime and Corporate Transparency Bill. If passed, the bill will likely enter into force in 2023, setting out enhanced powers for regulators and law enforcement, including the SFO and the National Crime Agency (NCA). It will also reform Companies House powers, establish additional verification requirements for company ownership and control, and create new powers to seize and recover crypto-assets.

The Bribery Act sets out four main offences:

• bribery (Section 1) – the offering, promising or giving of a bribe (commonly referred to as "active bribery");
• requesting or receiving a bribe (Section 2) – the requesting, agreeing to receive or accepting of a bribe (commonly referred to as "passive bribery");
• bribery of a foreign public official (Section 6) – bribery of a foreign public official to obtain or retain business, or a business advantage; and
• failure to prevent bribery (Section 7) – a corporate offence of failing to prevent bribery by an associated person on behalf of a relevant commercial organisation. This is a strict liability offence, meaning that the prosecutor need not prove that the company, acting through its senior management, possessed any particular state of mind at the time of the bribery offence.

Bribery and Requesting or Receiving a Bribe

It is an offence under Section 1 for a person to offer, promise or give a bribe. It is equally an offence under Section 2 to ask for, agree to or receive a bribe.

A bribe is a financial or other advantage given to another person, and it must be intended that the bribe should induce or reward improper conduct, or that the acceptance of the bribe in itself would be improper conduct. The improper conduct must relate to the exercise of a public function or be carried out in a business or employment context. The conduct must also be in breach of an expectation to act in good faith, impartially or in breach of an expectation arising out of the person’s position of trust (see Sections 3, 4 and 5 of the Bribery Act).

It is important to note that:

• the offence can arise even where no financial or other advantage is actually given or received;
• both offences can be committed indirectly – ie, through third parties. The bribe can be offered or accepted through an intermediary, and the person performing the improper conduct need not be the same person to whom the bribe is offered or given; and
• the offences apply to conduct outside the UK – the Bribery Act has wide extra-territorial effect. The bribe does not need to be agreed, paid or received in the UK and the conduct that is, or is intended to be, performed improperly need not be performed in the UK.

Definition of a Bribe

A bribe is "a financial or other advantage", which is not defined in the Bribery Act but, according to the Joint Prosecution Guidance and the explanatory notes to the Act, the term is a matter of fact for the jury to determine, based on its ordinary meaning.

Facilitation Payments

Although some jurisdictions (eg, the USA) tolerate genuine facilitation payments, they remain unlawful in the UK, and can be an offence under Sections 1 or 6 of the Bribery Act. Where that offending involves a corporate entity, it will be exposed to Section 7. However, it is important to note that prosecutors retain an element of discretion. In deciding whether to prosecute for a facilitation payment, authorities will consider the Full Code Test set out in the Code for Crown Prosecutors, the Joint Prosecution Guidance and, where relevant, the joint Guidance on Corporate Prosecutions.

The Full Code Test requires that prosecutors consider whether there is sufficient evidence to provide a realistic prospect of conviction and, if so, whether a prosecution is required in the public interest. The prosecution should proceed only if both stages of the Full Code Test are met. The Joint Prosecution Guidance sets out specific public interest considerations in relation to facilitation payments and factors tending in favour of and against prosecution. Factors tending in favour of prosecution include:

• large or repeated payments;
• payments that are planned or a standard way of conducting business;
• payments that indicate an element of active corruption of the official; and
• where an appropriate policy regarding facilitation payments was not correctly followed.

Factors tending against prosecution include:

• a single small payment likely to result in only a nominal penalty;
• payments identified through a genuinely proactive approach involving self-reporting and remedial action;
• where a clear and appropriate policy regarding facilitation payments was correctly followed; and
• where the payer was in a vulnerable position given the circumstances in which the payment was demanded.

The MoJ Guidance recognises (at paragraph 48) that there may be circumstances in which a person has no realistic alternative but to make payments, and suggests the common law defence of duress is available where payments are made to prevent "loss of life, limb or liberty". Whilst those are narrow circumstances, companies operating in relevant industries and/or locations should ensure that their anti-bribery policies and training include clear guidance on duress.

Failure to Prevent Bribery

Section 7 of the Bribery Act introduced strict corporate criminal liability for any corporate entity (specifically, a "relevant commercial organisation" – an RCO, discussed below) where bribery is committed by an "associated person" (AP) of that business. The only defence is to demonstrate that the RCO had "adequate procedures" to prevent bribery by its associated persons.

To convict under Section 7, the prosecution must prove that:

• a person was associated with a relevant commercial organisation (an AP of an RCO);
• the AP committed a bribery offence; and
• in doing so, the AP intended to obtain or retain business or a business advantage for the RCO.

The Section 7 offence only relates to the failure to prevent acts of bribery under Sections 1 and 6; it does not apply to the demand side of bribery – ie, the request or receipt of a bribe under Section 2.

The RCO can be liable under Section 7 even where the AP was not convicted of the underlying offence. However, there must be sufficient evidence to prove that an offence under Section 1 or 6 of the Bribery Act was committed.

All UK companies, and foreign companies that carry on part of a business in the UK, are caught by the definition of an RCO. Courts in the UK will have jurisdiction over an RCO regardless of where in the world the underlying bribery was committed.

A person is associated with the RCO if they perform services for or on behalf of the RCO, in whatever capacity. The definition of an AP (in Section 8 of the Bribery Act) is broad and includes an employee, agent or subsidiary. Whether that person "performs services for or on behalf of" the RCO will be a matter of fact in each case, depending upon the circumstances. The law presumes that an employee of an RCO is an AP; that presumption is rebuttable. The MoJ Guidance (at paragraphs 42 and 43) emphasises the importance of evidence as to what the associated person intended when committing the bribery.

Bribery of Foreign Public Officials

It is an offence to bribe a foreign public official (which is defined broadly in Section 6) with the intention to influence that person in their official capacity, but only where the bribe is intended to obtain or retain business or a business advantage.

If the written law applicable to the foreign public official allows or requires them to be influenced by a financial or other advantage, no offence will be committed.

This offence can be committed where the bribe is offered through a third party. Note that a Section 6 offence does not require intention by the briber that the foreign public official should perform their role improperly; if the evidence shows that the briber intended to influence the official to obtain or retain a business advantage then the briber will be guilty of the offence.

Hospitality and Promotional Expenditures

The MoJ Guidance recognises that bona fide, reasonable and proportionate hospitality and promotional expenditure is an important part of doing business. However, such expenditure can constitute a bribe if it is intended to induce or encourage improper performance by the recipient or, in the case of foreign public officials, if it is intended to influence the recipient in their official role to secure a business advantage. The Joint Prosecution Guidance notes that prosecutors need to consider the full circumstances of each case; where hospitality is lavish and beyond what may be reasonable in those circumstances, or where there were attempts to conceal it, there will be a greater inference that it was intended as a bribe.

Bribery Between Private Parties in a Commercial Setting

Sections 1, 2 and 7 of the Bribery Act (see above) apply to bribery whether it occurs in the public sector or between private parties in a commercial setting. Section 16 of the Bribery Act specifically provides that the Act "applies to individuals in the public service of the Crown as it applies to other individuals".

As previously noted, the definition of bribery in the substantive offences includes "financial or other advantage". Similarly, the definition of the bribe recipient's intended "improper performance" could well catch "influence-peddling". It would, however, be a matter of fact to be determined by a court as to whether any exchange of influence amounted to some kind of "other advantage".

The Bribery Act contains no specific accounting or book-keeping offences, but the Companies Act 2006 requires companies to keep adequate books and records. Specifically, failure to keep adequate accounting records constitutes an offence under Sections 386 and 387 of the Companies Act 2006.

In addition, the way bribes are accounted for will often constitute a false-accounting offence under Section 17(1) of the Theft Act 1968 – ie, the falsification of accounting records with the intent to gain for oneself, or to cause loss to another.

Public officials who misappropriate or misuse funds are liable to be prosecuted for several crimes, including offences under the Fraud Act 2006. They may also be charged with misconduct in public office, which is a complex and archaic offence that has recently been subject to scrutiny by the Law Commission. The offence of misconduct in public office arises where a public officer, acting as such, wilfully neglects to perform their duty and/or wilfully misconducts themselves to such a degree as to amount to an abuse of the public's trust in the office-holder without reasonable excuse or justification.

A public officer may find themselves charged with fraud (if they benefited in some way from their alleged criminality) or with misconduct in public office. If charged with a fraud offence, their status as a public official will be considered as an aggravating factor, justifying a higher sentence than for a private citizen.

The use of intermediaries is an important, and often pivotal, issue in many corruption cases. Each of the Bribery Act offences could arise through the use of an intermediary. The Section 1, 2 and 6 offences expressly include use of a third party for bribery, requesting or receiving a bribe or bribery of a foreign public official. Whilst each case will turn upon its own facts, intermediaries are likely to be "associated persons" for the purposes of Section 7, thereby creating corporate liability.

There are no limitation periods for the prosecution of indictable offences. However, only offences occurring on or after 1 July 2011 will be prosecuted under the Bribery Act; offences committed before that date are covered by the common law and statutory offences, including the (now repealed) Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916.

Cases such as the Rolls-Royce DPA demonstrate that conduct of a historic nature can and will be pursued; the Statement of Facts in that case covered criminal conduct spanning the period between 1989 and 2013.

The Bribery Act has extensive extra-territorial jurisdiction; it catches circumstances where the alleged offending occurred wholly outside the UK.

If the person committing the act or omission has a "close connection" with the UK, it is irrelevant that their conduct occurred entirely outside the UK. Under Section 12(4), a close connection with the UK includes where the person is a British national, a British citizen, ordinarily resident in the UK, or a body incorporated under UK law.

The corporate offence (Section 7) applies to any RCO (wherever incorporated) that carries on any part of its business in the UK. An RCO could be prosecuted for failure to prevent bribery even where the bribery takes place wholly outside the UK and the benefit or advantage to the company is intended to accrue outside the UK.

However, the Bribery Act does not define what constitutes "part of a business", although the MoJ Guidance states (at paragraph 36) that organisations need a "demonstrable business presence" in the UK. The MoJ Guidance notes, for example, that either having a UK subsidiary or being listed on the LSE would not in itself mean a company was carrying on a business or part of a business in the UK for the purposes of Section 7.

The following are examples of Section 7 cases that centred upon conduct overseas, often through an overseas office or subsidiary of the UK company.

• Sweett Group plc, the first corporate convicted under Section 7, pleaded guilty in December 2015. Its subsidiary in the United Arab Emirates had made corrupt payments to two senior directors at Al Ain Ahlia Insurance Company to secure a contract for construction of the Rotana Hotel in Abu Dhabi.
• Standard Bank plc entered into a DPA in relation to its Tanzanian sister company, Stanbic, and payments to a local partner in Tanzania. Although Standard Bank had no interest in, oversight or control over Stanbic, the latter was an AP because it was performing services on Standard Bank’s behalf and for its benefit; both companies stood to benefit from the transaction in relation to which the bribe was paid.

• Rolls-Royce plc and Rolls-Royce Energy Systems, Inc entered into a DPA in January 2017 in respect of a suspended charge under Section 7 (amongst other charges) regarding bribes paid by intermediaries and Rolls-Royce employees in Indonesia, Nigeria, China and Malaysia.
• In January 2020, the SFO secured a DPA with Airbus SE. The DPA charged Airbus with five counts of the failure to prevent offence across five jurisdictions.
• In July 2021, the SFO entered into a DPA with Amec Foster Wheeler Energy Limited (AFWEL). AFWEL admitted ten offences of corruption relating to the use of corrupt agents in the oil and gas sector by its legacy business. The offences spanned from 1996 to 2014 and took place across the world, in Nigeria, Saudi Arabia, Malaysia, India and Brazil. Under the terms of the DPA, AFWEL agreed to pay a financial penalty and costs amounting to GBP103 million in the UK, which formed part of the USD177 million global settlement with UK, US and Brazilian authorities.

• In October 2021, London-based energy company Petrofac Limited pleaded guilty to failing to prevent executives from using agents to bribe officials to win oil contracts in Iraq, Saudi Arabia and the United Arab Emirates between 2011 and 2017. The company admitted several counts of failing to prevent bribery contrary to Section 7 of the Bribery Act and was ordered to pay a confiscation order of GBP22,836,985 and a financial penalty in excess of GBP47 million.
• In June 2022, Glencore Energy (UK) Ltd pleaded guilty to five counts of bribery under Section 1 of the Bribery Act and two counts of the Section 7 failure to prevent offence. The offences related to the company’s operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.

Individuals and corporates can commit the offences of active bribery, passive bribery and bribery of a foreign public official under Sections 1, 2 and 6 of the Bribery Act.

Because these offences require mens rea, the liability of a corporate for the offences must be established through the "identification principle", which establishes that only the acts and state of mind of those who represent the "directing mind and will of the corporation" can be imputed to the corporation itself (Lennard v Asiatic Petroleum [1915] AC 705). The case of Tesco Supermarkets Ltd v Nattrass [1972] AC 153 defined the directing mind and will of a company as extending to the "board of directors, the managing director and perhaps other superior officers of the company who carry out functions of management and speak and act as the company". Under the Bribery Act, where the directing mind and will of the company have the necessary criminal intent, the corporate will be directly liable for the offences under Sections 1, 2 and 6. That contrasts with the strict corporate liability under Section 7.

Where an offence under Section 1, 2 or 6 of the Bribery Act is committed by a body corporate and it can be proved that the offence was committed with the consent or connivance of a senior officer or a person purporting to act in that capacity, that individual is also guilty of the offence under Section 14. However, where the offending was outside the UK, they will only be liable if they have a "close connection" to the UK under Section 12 of the Bribery Act.

By contrast, only an RCO can be liable for the offence of failure to prevent bribery by an associated person under Section 7. The RCO will incur liability for an offence or offences by the AP unless it can prove it had adequate procedures in place to prevent bribery, even where it was not aware of the offence. See 4.1 Defences for further information.

DPAs remain an attractive option for organisations, as they avoid a time-consuming, costly and damaging prosecution and trial. In essence, a DPA allows an organisation to take a one-off financial hit, remove uncertainty around its future and avoid an adverse impact on its share price.

For the adequate procedures defence (Section 7(2) of the Bribery Act) to succeed, the court must be satisfied that the company had adequate procedures in place to prevent bribery at the time of the relevant conduct.

Those procedures must be proportionate to that organisation's bribery risks and to the nature, scale and complexity of its activities. The MoJ Guidance recognises that no anti-corruption measures can prevent all instances of bribery, and specifies the six principles that should inform the procedures implemented by a relevant commercial organisation:

• proportionate procedures;
• top-level commitment;
• risk assessment;
• due diligence;
• communication (including training); and
• monitoring and review.

It is critical that the procedures in place are effective in practice.

In March 2018, Skansen Interiors Limited was the first contested prosecution of a corporate defendant for offences under Section 7 of the Bribery Act. In that case, the company unsuccessfully relied on the defence of adequate procedures. Skansen contended that, although it did not have a specific anti-bribery and corruption policy in place at the time of the alleged offending, there were a number of procedures for maintaining transparency and integrity in its business transactions. There were also anti-bribery clauses in the company’s relevant contracts, and the system for approving and settling invoices required multiple levels of internal approval. Furthermore, evidence adduced at trial demonstrated that the company’s employees were aware that bribery was prohibited. Skansen therefore argued that these checks and balances were sufficient for a company of its size (30 employees), given its localised operation. The jury, however, decided that the controls in place were insufficient and returned a guilty verdict.

As previously mentioned, the common law defence of duress is available where payments are made to prevent "loss of life, limb or liberty".

There are no further exceptions to the statutory defences outlined in 4.1 Defences.

There are no de minimis exceptions to the offences in the Bribery Act. However, when considering whether prosecution is in the public interest, a prosecutor may decide against enforcement where the bribe was of a low value. As previously noted in relation to facilitation payments, the Joint Prosecution Guidance includes "a single small payment likely to result in only a nominal penalty" amongst the factors tending against prosecution.

There are no sector or industry exemptions.

See the defence of adequate procedures under 4.1 Defences and the outline of the self-reporting regime and DPAs under 5.1 Penalties on Conviction.

The maximum penalty for an individual convicted on indictment under the Bribery Act is ten years’ imprisonment and/or an unlimited fine.

A corporate convicted of an offence under the Bribery Act faces an unlimited fine. Conviction is likely to result in a compensation order for any loss resulting from the offence and/or the confiscation of any criminal proceeds. An order to reimburse the cost of the investigation and prosecution of the offence is also likely.

When considering what penalty to impose, a court must follow any sentencing guidelines issued by the Sentencing Council or its predecessor, the Sentencing Guidelines Council. The Sentencing Council has, for example, issued guidelines in relation to three of the offences created by the Bribery Act, and a sentencing court will be bound to apply them. Where there is no sentencing guideline in existence, courts must follow any guidance provided by the Court of Appeal (Criminal Division) and consider the factors outlined in Part 12 of the Criminal Justice Act 2003.

Even where there are no criminal proceedings, it is open to a prosecutor to apply for a civil recovery order under Part 5 of POCA in order to recover property obtained through unlawful conduct. In practice, however, it will rarely be appropriate for criminal conduct by a company to be dealt with by means of a civil recovery order because it would be inconsistent with the basic principles of justice for the criminality of corporations to be glossed over by the imposition of a civil (as opposed to a criminal) sanction.

The DPA Code of Conduct suggests that the appropriateness of a civil recovery order should be considered where neither limb of the evidential stage can be met by the conclusion of DPA negotiations, and it is not considered appropriate to continue the criminal investigation.

Previous Corporate Penalties

In July 2016, the SFO entered into a DPA with Sarclad Ltd, a UK technology company based in Rotherham, regarding the failure to prevent a bribery offence. Sarclad paid a total of GBP6,553,085, comprised of disgorgement of gross profits of GBP6,201,085 and a GBP352,000 financial penalty.

In January 2017, Rolls Royce plc paid a total of GBP497.25 million plus interest and the SFO’s costs of GBP13 million (as well as large sums in settlement with enforcement authorities in the US and Brazil) in relation to offences including conspiracy to corrupt, false accounting and failure to prevent bribery. In that case, the conduct covered by the DPA spanned three decades, involved multiple parts of the business and took place across seven jurisdictions.

In April 2017, Tesco Stores Limited entered into a DPA with the SFO in relation to creating a false account of its financial position. Tesco paid a total of GBP128,992,500 and the SFO’s costs of GBP3,069,951.

In July 2019, the SFO entered into a DPA with Serco Geografix Ltd in relation to fraud and false accounting offences that concerned misleading the Ministry of Justice about the Serco parent company’s profits. Serco paid a financial penalty of GBP19.2 million and the SFO’s costs of GBP3.7 million. This was in addition to the GBP12.8 million paid by Serco to the Ministry of Justice as part of a civil settlement in 2013.

In October 2019, the SFO agreed a DPA with Güralp Systems Ltd (GSL), covering the offence of conspiracy to make corrupt payments, contrary to Section 1 of the Criminal Law Act 1971. The terms of the agreement required GSL to pay over GBP2 million and to co-operate with the SFO to ensure compliance with the Bribery Act.

In January 2020, the SFO agreed a record-breaking DPA with Airbus SE relating to five counts of the failure to prevent offence across five jurisdictions. The DPA is the world's largest resolution for bribery, amounting to a total penalty of almost EUR3.6 billion, EUR991 million of which was to be paid to the SFO by way of disgorgement of profits, a fine and the SFO's legal costs. It is also thought to be the first co-ordinated settlement agreement between the UK, US and French authorities.

In October 2020, the SFO entered into a DPA with Airline Services Limited (ASL), under which ASL accepted responsibility for three counts of failing to prevent bribery contrary to Section 7 of the Bribery Act, arising from the company’s use of an agent to win three contracts to refit commercial airliners for Lufthansa, worth more than GBP7.3 million. The agent acting for ASL was also working as a project manager for Lufthansa and was therefore privy to commercially sensitive information about potential competitors to ASL and exploited this information to influence and advantage ASL’s own tender bids. Under the DPA, ASL was required to pay GBP2,979,685, consisting of a financial penalty of GBP1,238,714, disgorgement of profits representing the gain of the criminal conduct of GBP990,971, and a contribution to the SFO’s costs of GBP750,000. The company is also obliged to co-operate fully with the SFO and any other domestic or foreign law enforcement agency.

On 19 July 2021, the SFO entered into two DPAs with two UK companies (which at the time of writing have not been named due to reporting restrictions) for bribery offences contrary to Sections 1 and 7 of the Bribery Act. Under the DPAs, the companies are required to pay GBP2,510,065, by way of disgorgement of profits and financial penalty in relation to bribery connected with multimillion-pound UK contracts.

The conviction of Skansen in April 2018 for failure to prevent bribery represents an anomaly in corporate sentencing. Skansen was a dormant company that had, prior to 2014, traded in office interior design. Following a change of senior management in early 2014, the company discovered a number of irregular payments in respect of a number of its contracts. The subsequent internal investigation resulted in a self-report to the City of London Police and other law enforcement authorities. Although the company ceased to trade shortly thereafter, the Crown Prosecution Service (CPS) elected to prosecute, despite the company’s proactive approach to (and assistance in) the investigation. Because Skansen was a dormant company with no assets, the court could only impose an absolute discharge, which immediately became spent. The rationale for prosecution of a dormant company where there is no prospect of any meaningful penalty on conviction has been the subject of debate. The CPS, however, justified the prosecution on the basis that it would send a message to the industry about the importance of putting anti-bribery procedures in place.

Skansen should not, however, be viewed as an indicator of the penalties likely to be imposed on trading companies that are convicted for Section 7 offences. Other consequences may include disqualification of an individual to act as a company director and exclusion from projects funded by the World Bank or its partner development banks and cross-debarment. A conviction under Section 1, 2 or 6 of the Bribery Act will lead to the mandatory exclusion of an economic operator (defined in Section 2 of the Public Contracts Regulations 2015) from participation in public tenders, under the Public Contracts Regulations 2015. The Section 7 offence of failure to prevent bribery will not trigger mandatory exclusion but may give rise to grounds in support of a discretionary exclusion under the Public Contracts Regulations 2015. Clearly, such debarments could prove fatal to any company with a significant portion of revenues derived from public contracts.

Public contracts would have been a relevant concern for G4S in its July 2020 DPA with the SFO for fraud offences. Although this was not a corruption case, it is instructive for practitioners in this area generally, including with regard to the company’s delayed approach to co-operation with the SFO and the consequential effect of that delay upon the relatively limited discount applied to the ultimate financial penalty.

The range of sentences appropriate for each offence under the Bribery Act is specified by the Sentencing Council's Corporate Offenders: Fraud, Bribery and Money Laundering Offences Guideline. For each offence, the Council has specified categories with sentencing ranges reflecting varying degrees of seriousness and a starting point for each category. Once the starting point is determined, the court will take into account aggravating and mitigating factors set out in the guidance.

For corporate offenders, the starting point will generally be the gross profit arising from the contract(s) obtained (or otherwise affected) by the criminal conduct. That figure is then multiplied by a prescribed percentage, depending on whether there is low, medium or high culpability. The figure is then adjusted upwards or downwards, based on the presence of aggravating and/or mitigating factors. A court is also required to consider the totality and proportionality of its sentence, with the Guideline stating that the "combination of orders made, compensation, confiscation and fine ought to achieve the removal of all gain, appropriate additional punishment, and deterrence".

Section 7 of the Bribery Act 2010 creates a specific defence for corporations that can demonstrate they had "adequate procedures" in place to prevent bribery; see 4.1 Defences.

The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 (Lobbying Act) regulates lobbying in the UK. Under the Lobbying Act, consultant lobbyists are required to be registered; carrying on the business of consultant lobbying whilst unregistered is an offence. It is also an offence to fail to provide certain information when required by the Registrar of consultant lobbyists. Furthermore, donations received by political parties are controlled by the Political Parties, Elections and Referendums Act 2000, and registered parties may only accept donations from "permissible donors".

Regarding disclosure, individuals and corporates operating in the "regulated sector" (ie, financial institutions, professionals and those dealing with high-value transactions) also have concurrent duties to report and prevent money laundering under POCA. These duties require those in the regulated sector to report activities and transactions they reasonably consider to be suspicious. Failure to do so may result in that individual or corporation being prosecuted in their own right under the "failure to disclose" offence.

In August 2019, the SFO published Corporate Co-operation Guidance, aimed at providing organisations and their legal advisers with transparency about what to expect if they self-report bribery to the SFO.

Whistle-blowing protection is afforded to UK workers under the Employment Rights Act 1996 (ERA), as amended by the Public Interest Disclosure Act 1998 (PIDA) and the Enterprise and Regulatory Reform Act 2013 (ERRA). The ERA was introduced to protect employees from being unfairly dismissed, or otherwise subjected to detriment, where they had made a "protected disclosure" – ie, disclosed information about an alleged wrongdoing in certain defined circumstances.

To qualify for protection, numerous requirements need to be met.

The ERRA strengthened the whistle-blowing protections under the ERA in 2013 by introducing personal liability for co-workers, or agents of an employer, who subject a whistle-blower to detriment in the course of their employment because they have made a protected disclosure. Employers also have vicarious liability where other workers or agents subject a whistle-blower to detriment, unless the employer has taken all reasonable steps to prevent that behaviour.

There are no financial incentives for whistle-blowers to report bribery or corruption in the UK, although, in exceptional circumstances, the Competition and Markets Authority offers incentives of up to GBP100,000 for information that leads to the successful investigation and prosecution of cartels.

Where a person admits to offending and agrees formally to co-operate with a criminal investigation and any subsequent prosecution, they may be eligible to enter a "SOCPA agreement" with the prosecutor under the Serious Organised Crime and Police Act 2005 (SOCPA). In exceptional cases, a person might receive immunity from prosecution in exchange for their co-operation. In practice, however, it is more common to see co-operation lead to a reduction in sentence, separately and in addition to the usual discount a defendant receives upon entering a guilty plea.

See 6.4 Protection Afforded to Whistle-Blowers.

Please see 7.2 Enforcement Body regarding civil, criminal and/or administrative enforcement of anti-bribery and anti-corruption laws in the UK.

In England, Wales and Northern Ireland, the SFO is the lead prosecution body for offences under the Bribery Act. It was established under the Criminal Justice Act 1987 (CJA 1987) to investigate and prosecute offences involving serious and complex fraud. In deciding whether to pursue a particular case, the Director of the SFO considers whether the criminal conduct undermines UK commercial or financial interests, the scale of the actual or potential financial loss and whether there is a significant public interest issue. In Scotland, the primary prosecutor is the Lord Advocate. The CPS also pursues cases brought by individual police forces around the UK.

The other major enforcement bodies are the NCA (a criminal investigative agency) and the Financial Conduct Authority (FCA). The NCA’s economic crime division contains a specific international corruption unit, which has a particular focus on money laundering offences arising from corruption overseas and recovering the proceeds of crime. The NCA investigates cases for subsequent prosecution by the CPS. By contrast, the FCA does not typically prosecute offences under the Bribery Act, but it has a wide remit for regulating the financial services industry, which includes the imposition of rules and requirements for systems and controls to prevent financial crime, including bribery and corruption. The interplay between the FCA and the SFO is often critical to the outcome of a financial services investigation, particularly in relation to any agreement as to the scope of each respective agency's investigation.

The National Economic Crime Centre (NECC) was launched in 2018, with the primary function of co-ordinating the national response to fraud and corruption in the UK. It brings together law enforcement and justice agencies, government departments, regulatory bodies and the private sector. It has both a law enforcement and a crime prevention role. The NECC is able to direct the SFO to investigate corruption cases, among other matters.

Under Section 2 of the CJA 1987, the SFO has extensive and intrusive powers to compel the production of information.

Put simply, the SFO need only issue a formal letter of demand specifying the categories of information, including documents, that it requires from the recipient. In practice, investigators often start from the premise of issuing a broad demand for documents. Recipients of any such notice should carefully consider its scope, and engage promptly with the SFO to negotiate the scope of the demand and the timeframe for response (wherever possible).

Wide-ranging demands present significant practical difficulties for companies, which may hold data for thousands of affected contracts or employees and store the data in various locations, including overseas. The legal issues that this presents include a potential clash with data privacy laws; various jurisdictions require specific informed consent before personally identifiable information is processed for specific purposes, such as a criminal investigation. Similarly, the company should be alive to its potential legal risk in other jurisdictions where its disclosure of documents to the SFO would run contrary to any banking secrecy statutes, blocking statutes or state secrecy laws.

The SFO also has limited pre-investigation powers under Section 2A of the CJA 1987, enabling it to receive documents and compel witnesses to answer questions before opening a formal investigation in relation to cases of suspected international bribery. The Economic Crime and Corporate Transparency Bill, however, proposes an expansion of the scope of the pre-investigation powers to include all cases within the SFO’s remit involving serious or complex fraud, bribery and corruption.

The extra-territorial effect of Section 2 powers is considered further in 7.5 Jurisdictional Reach of the Body/Bodies.

A prosecuting agency is responsible (alongside the defence) for informing the sentencing court of any relevant mitigating and aggravating factors that are present in the case.

Plea agreements are available to individuals in certain circumstances. When considering a plea agreement, prosecutors must adhere to specific guidance in the Attorney General’s Guidelines on Plea Discussions in Cases of Serious or Complex Fraud (published November 2012) and the Criminal Procedure Rules. The general principles of the Guidelines are that, when conducting plea discussions, prosecutors must act openly, fairly and in the interests of justice.

Those principles require the prosecutor to ensure:

• that the defendant has sufficient information to participate in the plea discussions;
• that there is transparency before the court – ie, that any agreement put to the court fully and fairly reflects the terms agreed; and
• fairness in its dealings with the defendant – ie, not putting any improper pressure on them or misrepresenting the strength of the prosecution case, and acting in the interests of justice, meaning that the plea agreement reflects the severity and extent of the offending behaviour, and pays careful attention to the impact of the plea agreement on the victims and on the chances of bringing a successful prosecution against any other person involved in the underlying offences.

As outlined in 7.2 Enforcement Body, the SFO’s Section 2 powers have limited extra-jurisdictional effect where the "sufficient connection test" is met.

In 2018, the extra-territorial reach of the SFO’s legislative powers was tested in KBR v SFO [2018] EWHC 2368 (Admin). In that case, the SFO had initiated an investigation into suspected bribery at KBR Ltd, a UK subsidiary of KBR Inc, a US-registered company. The SFO issued KBR Ltd with a Section 2 notice and subsequently served a further notice upon two officers of KBR Inc who were visiting the UK. KBR challenged the legality of that Section 2 notice by way of judicial review, arguing that the SFO did not have the power to require a non-UK company to produce materials held outside of the jurisdiction.

The High Court held that the SFO's powers under Section 2(3) of the CJA were intended to have some extra-territorial application but that it could compel foreign companies to produce documents held overseas only when there is a "sufficient connection" between the company and the UK. On the facts, there was a sufficient connection between KBR US and the UK, as the payments made by KBR UK appeared to have been approved by KBR US. KBR appealed the decision directly to the Supreme Court.

The Supreme Court unanimously allowed the appeal. Its starting point was the presumption that domestic legislation is not generally intended to have extra-territorial effect. This presumption reflects the requirement that states should not infringe each other's sovereignty and the concept of international comity. Furthermore, there was no reason why the presumption should be displaced in relation to Section 2(3) of the CJA, either by the language of the statute or by the intention of Parliament and the availability of mutual legal assistance schemes.

The SFO (amongst others) may seek mutual legal assistance from overseas authorities via the Crime (International Co-operation) Act 2003. Under that statute, the SFO may utilise the assistance of overseas authorities to serve various documents (eg, summonses, Section 2 notices), obtain evidence (including witness statements, documentary and banking evidence) and execute search and seizures.

The Crime (Overseas Production Orders) Act 2019 (the COPO Act) gives law enforcement agencies such as the SFO and prosecutors the power to obtain electronic data directly from an overseas communications service provider. The UK government has stated that those extensive powers will be subject to robust judicial oversight, and emphasised the relevant statutory protections for legally privileged or journalistic material.

In mid-2020, the UK-US Bilateral Data Access Agreement (the Bilateral Agreement) became effective. The legislative background for that treaty is the COPO Act and the US Clarifying Lawful Overseas Use of Data Act. In brief overview, the Bilateral Agreement seeks to improve cross-border co-operation by allowing direct access, upon application, to "covered data" (ie, communications content, metadata and traffic data) held by a "covered communications provider" (ie, any business that provides data communication, processing or storage to the public).

Since late 2018, the SFO has discontinued more investigations than it has commenced. Notably, it has discontinued several high-profile and long-running investigations, most recently (June 2022) closing a four-year investigation into defence technology company Chemring. The SFO had been investigating bribery, corruption and money laundering arising from Chemring’s business following a self-report from the company.

Despite the closure of a number of historic investigations, the SFO continues to investigate a number of fraud and bribery matters. In April 2022, it announced that it was "stepping up" its investigation into suspected fraud, fraudulent trading and money laundering relating to companies within the Gupta Family Group Alliance, including financing arrangements with Greensill Capital UK Ltd.

Following the prosecution of Skansen (see 4.1 Defences) in 2018, the company’s former managing director and another individual (the recipient of Skansen’s bribes) received custodial sentences of 20 months and 12 months respectively. Both individuals had pleaded guilty to bribery and their sentences reflect a discount. Ancillary orders were also used, with one individual being disqualified from acting as a company director for seven years.

In June 2019, the former managing director and owner of UK company ALCA Fasteners Limited was sentenced to two years' imprisonment for paying GBP300,000 in bribes to a purchasing manager employed by one of ALCA’s customers in order to secure contracts valued at GBP12 million. In addition to the custodial sentence, a seven-year Company Director Disqualification Order was imposed, and the individual was required to pay a Confiscation Order in the amount GBP4,494,541 and prosecution costs to the SFO in the amount of GBP478,351.

More recently, in October 2021, David Lufkin, a former executive of Petrofac, received a sentence of two years' imprisonment (suspended for 18 months), having entered earlier guilty pleas to a total of 14 counts of bribery contrary to Sections 1 and 2 of the Bribery Act. The offences admitted by Mr Lufkin related to the making of corrupt payments to influence the award of contracts to Petrofac worth in excess of USD730 million in Iraq and in excess of USD3.5 billion in Saudi Arabia. In addition to his guilty pleas, Mr Lufkin had provided extensive assistance to the SFO in its investigation.

In March 2019, the House of Lords Select Committee published its report entitled "The Bribery Act 2010: Post-legislative Scrutiny", which considered whether the Act was fulfilling its intended purpose. The report concluded that the Bribery Act is an "excellent" piece of legislation, with offences that are clear and all-embracing. It noted that the availability of the corporate failure to prevent offence (Section 7) is particularly effective at encouraging company management to conduct business in an ethical manner.

In September 2022, SFO Director Lisa Osofsky delivered a speech in which she reflected on priorities for the SFO she had set out in 2018. Osofsky stated that she will continue to push those priorities:

• proactive and confident case progression;
• smart use of technology in investigations;
• enhanced international co-operation; and
• an intelligence, evidence-led approach.

She further stated that one of the biggest challenges currently faced by the SFO is disclosure, and that another priority for the year ahead will therefore be rebalancing the system for justice by recognising the challenges that the SFO faces in document-heavy investigations.