Corruption and the bribery of foreign public officials has gained significant public attention- especially since the verdict in the Siemens case.  The company was fined $1.6 billion, which is the largest fine administered to-date for violating the FCPA. The severity of the fines handed out are intended to send a message to all corporations, informing them of the consequences they will face if found to be engaging in corrupt practices.

According to the Ministry of Justice in the United Kingdom, bribery " is a serious crime that destroys the integrity, accountability and honesty that underpins ethical standards both in public life and in the business community."

Passed in April, the UK Bribery Act is one of the latest developments in the fight against corporate corruption. Previously criticized for relaxed views on corruption, the UK has now introduced legislation that's relevant to the current challenges imposed on organizations engaging in international business transactions.

UK Bribery Act

According to the Guardian.co.uk article "New Bribery Law Puts Overseas Payments Under Scrutiny," the anti-corruption law overhaul in the UK is described as "one of the most significant reforms to corporate criminal law in a century."

Many of the requirements outlined in the UK Bribery Act are similar to those in the US Foreign Corrupt Practices Act.  However, the UK Bribery Act goes further than the FCPA to include prosecution for acts of bribery in both the public and private sectors.

The study “Will You Act Now or Pay Later,” released by PricewaterhouseCoopers, provides insight into the Bribery Act, stating:

"Although the UK has anti-bribery legislation in place, the Act represents a notable enhancement, particularly in the area of corporate liability. Many companies appear unaware of the full implications of the Act and unprepared to deal with the practical consequences. In our experience, establishing adequate processes and procedures for compliance with anti-bribery legislation that are effective in practice takes considerable time, commitment (from top management downwards) and resources. Companies need to be taking action now."

The Ministry of Justice in the UK outlines some of the elements included in the Act:

• An offence is committed for offering, promising or giving bribes, as well as requesting, agreeing to receive or accepting bribes.
• An offence is committed when a company engaging in business in the UK fails to take action to prevent bribery- even if the company originates in a different country.
• An offence is committed when a person bribes a foreign public official in order to influence decisions regarding obtaining business or related contracts.
• The Secretary of State must publish guidance relating to procedures that relevant commercial organizations can enact to prevent persons associated with them from bribing, revisions can be made by the Secretary of State.
• An offence is committed by a commercial organization should it fail to prevent a bribe being paid for or on its behalf.  It will be a defense if the organization has adequate procedures in place to prevent bribery.

Consult the Bribery Act in it's entirety to view a complete list of offences and preventative measures companies must establish if they plan on doing business in the UK- or with anyone connected to the UK for that matter.

RELATED: London Calls: UK Bribery Act Guidance is Out!

Grey Area

The UK Bribery Act contains elements requiring further clarification. The interpretation of these areas by regulators, enforcement agencies and courts, may have a significant impact on the outcome of the penalty administered for violating the Act. It's important to pay attention to and refrain from involvement in the acts listed below in order to further reduce unexpected risks related to Bribery Act violations.

As outlined in the study “Will You Act Now or Pay Later,” released by PricewaterhouseCoopers, some examples of these "grey areas" include:

"• “Facilitation” or “grease” payments- These continue to remain illegal under the Act as they are under current UK law. Historically, prosecution discretion has been used to allow some flexibility in this area; this is set to continue but potentially with additional guidance as to how this discretion will be exercised.

• “Adequate procedures”- What constitutes as “adequate procedures” in the context of a corporate defense of failing to prevent bribery will be the subject of non-statutory guidance to be published shortly. This guidance will adopt a principles and examples approach, and will therefore leave organizations to interpret the appropriate response in their circumstances.

• The Act allows for unlimited fines but does not clarify how they will be calculated. The Government has stated that it may ask the Sentencing Council to provide additional guidance."

To mitigate risk, companies must look beyond the reputation of the company or group they hope to do business with when making decisions. Companies need to consider the reputation of the country in which they plan to expand into, as each country has different views on corporate corruption. Bribery imposes significant costs on society, hindering global economic advancement.