The Anti-terrorism, Crime and Security Act 2001 was passed in December after a stand off between the Government and House of Commons on one side and the House of Lords on the other. John Sissons, a consultant to Herbert Smith, discusses one of the less publicised aspects of this legislation, namely the introduction of measures dealing with bribery by United Kingdom companies and individuals of foreign officials and commercial agents that takes place overseas. In this article, he pays particular attention to the position of oil companies.
Former UK law
These measures introduced by the new legislation mean that the law of the UK in relation to bribery has changed in a fundamental way. It has long been an offence to offer or make corrupt payments in the UK. Traditionally, however, UK law does not (save in exceptional circumstances) create criminal offences in relation to the acts of a UK citizen or company carried out entirely overseas. Such matters are left to the law of the place where the relevant acts take place. Now, bribery and corruption fall within the rare category of cases where such criminal liability does arise. It is now an offence for a company or individual to offer or pay a bribe to an overseas public official or commercial agent, even if all the acts constituting the crime took place overseas. Previously, companies may have adopted a somewhat relaxed attitude if put into a position where a dubious payment to a third party (perhaps described as an introductory commission) was necessary to secure or conduct business. Particularly in cases where the third party was closely connected to senior individuals within the government of the country concerned, it was unlikely that any serious investigation would be undertaken in that country, let alone a criminal prosecution. Now, overseas corrupt payments would give rise to the possibility of criminal prosecutions in the UK against the company and the individual managers making and arranging such payments. There are also tax implications.
Criticism of the UK position
Theses changes to the law come, not as a result of some sudden revelation linking bribery to terrorism, although there is evidence of such a connection, but from persistent pressure from organisations such as the Organisation for Economic Co-operation and Development ("OECD") which have for long argued that corruption in less developed countries distorts markets, hinders development and discriminates against the poor. In 1998 the UK ratified the OECD Convention on Combating Bribery of Foreign Public Officials in International Business...