While the primary domestic anti-bribery statute, the FCPA, has been on the books for nearly four decades, the UK’s principal anti-bribery law, the UK Bribery Act, is merely an infant, having become effective in July 2011.  Recently, however, the UK Bribery Act took a step toward maturity as the UK’s Serious Fraud Office (“SFO”), the office with primary responsibility for enforcing the Bribery Act, obtained its first criminal convictions under the law.  While they do not signal any significant legal developments, these first Bribery Act convictions serve as a reminder for U.S. companies operating abroad that they must be cognizant not only of the FCPA, but also its UK counterpart.

The SFO’s first Bribery Act convictions stemmed from an investigation of a biofuel company, Sustainable AgroEnergy.  The investigation led to charges that the company’s executives had defrauded investors regarding the company’s assets and liabilities.  The investigation also revealed that two executives had committed violations of Section 1 and Section 2 of the Bribery Act, which prohibit offering a bribe and being bribed, respectively.  Those executives were convicted and received sentences of six years and four years to run concurrently with sentences imposed for the fraud convictions.

While these convictions do not themselves shed any light on the legal nuances of the Bribery Act, they indicate that enforcement of the Bribery Act—which does not apply to conduct before July 2011—is reaching maturity.   These convictions are also a reminder that U.S. companies with an international presence must be cognizant of the UK Bribery Act and the key ways in which it is different from, and broader than, the FCPA:

  • Bribe Recipient:  While the FCPA applies only to bribes of foreign officials, the UK Bribery Act prohibits the bribery of anyone.
  • Nature of Violation:  While the FCPA prohibits bribing another, the UK Bribery Act prohibits both bribing and being bribed.
  • Defenses:  While the FCPA provides defenses for good-faith business promotion or where the payment is clearly lawful under the law of the foreign country, the UK Bribery Act provides no similar defenses.

The SFO’s enforcement of the Bribery Act will only increase following this initial conviction.  Pundits speculate that next major steps in Bribery Act enforcement include prosecution of a corporation itself and a prosecution where bribery forms the primary basis of the charges.  With this long road ahead, there remains no time like the present for U.S. companies with a presence in the UK to revamp their compliance programs to capture the UK Bribery Act’s unique qualities.