The Adequate Procedures Defense under the UK Bribery Act: A British Idea for the Foreign Corrupt Practices Act

Article excerpt


On July 1, 2011, the United Kingdom's new anti-bribery law, the UK Bribery Act ("Bribery Act"), came into force.1 The Bribery Act, one of the most comprehensive international laws governing both domestic and foreign bribery, has been viewed as a broader and tougher foreign anti-bribery law than its United States' counterpart, the Foreign Corrupt Practices Act ("FCPA").2 This was particularly true in the area of punishing corporations for failing to prevent bribery, a strong feature of the Bribery Act without parallel in the FCPA.3 However, the Bribery Act provides an additional safeguard unlike anything in the FCPA, an "adequate" compliance procedures defense to liability for the corporate failure to prevent bribery.4 This compliance procedures defense, available to organizations that can "prove" that they "had in place adequate procedures designed to prevent persons associated" with them from committing bribery, represented a novel development in the foreign antibribery laws.5 It also stirred up debate within the United States on whether there should be a similar defense under the FCPA.6

While the Bribery Act has drawn attention to the idea of a compliance procedures defense under the FCPA, this defense has been considered in the United States before. A compliance procedures defense was proposed during amendments to the FCPA in 1988, and more recently by notable securities practitioner James Doty in the form of a proposed regulation governing the FCPA.7 Now that the Bribery Act has refocused attention on the idea of a compliance procedures defense under the FCPA, the time is ripe for serious consideration of such a defense. I believe that the United States should adopt a compliance procedures defense for the FCPA similar to the adequate procedures defense under the Bribery Act. I believe that such a defense would be a good policy in that it would protect companies truly seeking to do the right thing in compliance with the FCPA from being held accountable for violations committed by rogue employees. I also believe that there are certain minimum procedures that should be incorporated into any FCPA compliance program for the purposes of utilizing such a defense. These procedures could be specified in guidance provided by the relevant government authorities, including the United States Department of Justice ("DOJ").

This article will explain the Bribery Act, its adequate procedures defense, and recent guidance on the defense provided by the United Kingdom. The article will then describe the FCPA and the role of compliance procedures in the sentencing phase of the statute. Previous suggestions for a compliance procedures defense to the FCPA will next be explored, including recent suggestions for a defense by the U.S. Chamber of Commerce in light of the Bribery Act. I will then give my recommendation for a compliance procedures defense to the FCPA for certain violations of the law's anti-bribery provisions. Finally, I will provide "Eleven Comandments" for an effective FCPA anti-bribery compliance program. These rules specify minimum procedures that 1 believe should be included in any FCPA compliance program for purposes of complying with the FCPA and for using a proposed compliance procedures defense.

I. The Bribery Act and its Adequate Procedures Defense for the Failure to Prevent Bribery

On April 8, 2010, the United Kingdom enacted the Bribery Act.8 The new law criminalizes the bribery of domestic and foreign government officials, commercial bribery, and receipt of a bribe.4 It also criminalizes the failure of corporations to prevent bribery.10 For purposes of this article, the discussion will focus on the Bribery Act as it applies to the bribery of foreign public officials.

A. Bribery of Foreign Public Officials

Section 6 of the Bribery Act criminalizes the bribery of foreign public officials and is the section most analogous to the relevant anti-bribery provisions under the FCPA. …


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