FCPA and UKBA: Similarities and Differences

August 21, 2020
UK Bribery Act, ISO 37001, ABMS, FCPA, United Kingdom, Pakistan, Malaysia, United Arab Emirates

While more governments around the world are enacting new legislation to combat corruption, two laws still stand above the rest in familiarity and scope: The U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act 2010 (UKBA). While these laws have some overlapping features, there are some key differences. In this article we will explore some of the key provisions in both of these landmark anti-bribery anti-corruption laws, looking at both similarities and differences.

 

FCPA – A History

The FCPA was passed in 1977, long before most governments were even considering specialised laws to deal with bribery and corruption. The FCPA (as amended, 15 U.S.C. §§ 78dd-1, et seq. [“FCPA”]), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.

Specifically, the anti-bribery provisions of the FCPA prohibit “the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person” (U.S. Dept. of Justice).

The FCPA’s anti-bribery provisions have applied to all U.S. persons and certain foreign issuers of securities since the law was enacted in 1977. Amendments to the FCPA in 1998, however, extended the anti-bribery provisions to “foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.”

 

UK Bribery Act 2010: A Toughened Stance

The Parliament of the United Kingdom passed the UK Bribery Act in 2010 to replace previous common law provisions against bribery. Before the UKBA, anti-bribery law in the UK was based on the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916, each of which were deemed inadequate in the modern economy. Passage of the UKBA brought crimes of bribery and corruption, including the bribery of foreign officials and, notably, the negligence and failure of an entity to prevent bribery on its behalf. UKBA also dictates strict penalties for violations of bribery and corruption, including a maximum 10 years imprisonment, unlimited fines, and allowing for the confiscation of property deemed as proceeds of a crime.

The UKBA has a broad scope. An individual or organisation anywhere in the world can be prosecuted if they are alleged to have committed the crime of bribery or corruption, and have links to the United Kingdom. It’s considered one of the strictest anti-bribery measures in the world (legislation.gov.uk).

 

Similarities

Let’s first look at what the FCPA and the UKBA have in common.

Both laws prohibit bribing foreign officials. It is expressly prohibited to provide an illegal gratuity of any kind to a government official, and the FCPA and UKBA provide punishments for such behaviour.

Corporations are liable for bribery. Although they handle the punishments a bit differently (more on that below), the FCPA and UKBA hold organisations to account in bribery and corruption investigations. Punishments for individuals can include prison time and/or fines. Again, they differ on the details, but the FCPA and UKBA have key provisions that can prove rather punishing for individuals caught committing bribery or corruption.

 

Differences

Now let’s look at some fundamental differences between these two anti-bribery anti-corruption laws.

UKBA prohibits bribing private business people. This is a measure of the law the FCPA lacks. The UKBA prohibits bribes paid to “any person” to induce them to act “improperly”. So, the law applies to both public and commercial bribery.
The FCPA considers intent as a factor. It stipulates that an act must be made “to obtain or retain business” to be considered illegal. The UKBA makes no such distinction, as an “improper action” is, on its own, a punishable offense.
UKBA punishes both giving and receiving of bribes. This is a departure from the FCPA, which only prohibits payment of a bribe in an “active” vs. “passive” consideration of the act.

UKBA punishments are stricter. Under the UKBA, individuals face up to 10 years imprisonment and unlimited fines. Entities also face unlimited fines. Under the FCPA, an offender may be imprisoned up to five years and fined up to USD 250,000. Entities can be fined up to USD 2 million. For books, records/internal control violations, individuals may face imprisonment up to 20 years and fines up to USD 5 million (entities USD 25 million).

“Facilitating payments” are okay under the FCPA. The FCPA gives a pass if such payments are properly recorded. Not so with the UKBA. A “facilitating payment” is considered a bribe, and is prosecuted as such.

 

Conclusion

Just based on the descriptions above, it becomes obvious that an organisation needs expert compliance personnel and thorough anti-bribery anti-corruption controls. The possibility of unlimited fines should be enough to get any business leader’s attention, and the fact that a company that merely fails to prevent bribery on its behalf can be prosecuted under the law.

ISO 37001 Anti-bribery Management Systems standard outlines the fundamental elements needed to establish anti-bribery anti-corruption compliance. Engage ABAC®’s ISO 37001:2016 training and certification in order to be proactive in preventing and detecting bribery at all levels of your organisation. ABAC® experts are skilled in developing and implementing programs tailored to each client’s needs and requirements. Learn more about ISO 37001:2016 Anti-Bribery Management System today.

 

About ABAC® Center of Excellence

ABAC® is an independent certification body powered by CRI Group. ABAC® Center of Excellence offers a complete suite of services and solutions designed to educate, equip & support the world’s leading business organisations with the latest best-in-practice risk & performance assessments, systems improvement & standards certification. ABAC® programs protect your organisation from damaging litigation & safeguard your business in the global marketplace by providing certification & training in internationally recognised ISO standards, such as ISO 37001 Anti-Bribery Management SystemsISO 19600 Compliance Management Systems and ISO 31000 Risk Management Systems.

GET A FREE QUOTE  or CONTACT US to discuss your anti-bribery, risk and compliance needs.