Bribery: The practice of offering something, usually money, to gain an undue or illicit advantage. A bribe needn’t be in cash. It can be offering, promising, giving, receiving, or soliciting anything of value (not only cash, but gifts, hospitality, entertainment, travel, jobs, internships, loans, stock—something of “value” to the receiver, even if it costs nothing to the giver), directly or indirectly, with the intent to influence how someone carries out (including omitting carrying out) a public, official, commercial, or legal duty.
Bribery Act: The Bribery Act 2010 was introduced to update and enhance UK law on bribery, including foreign bribery, in part to better address the requirements of the 1997 OECD Anti-Bribery Convention. It is enforced by the Serious Fraud Office (SFO) and the Crown Prosecution Service (CPS).
It is now among the strictest laws internationally on bribery. It includes the innovatory offense of the failure of commercial organizations to prevent bribery on their behalf. This applies not only to the organization itself but also to individuals and employees, and it is a strict liability offense, which broadly means that there is no need to prove any kind of intention or positive action for the offense to be committed.
Corruption: An abuse of (or inducement to abuse) a position of trust or power (personal, political, or commercial) in order to gain an undue personal, political, or commercial advantage.
Corruption Perceptions Index (CPI): An index, published by Transparency International, which measures the perceived levels of public sector corruption (as of 2016) in 176 countries and territories.
Covered Foreign (Government or Public) Official: The UK Bribery Act 2010 official definition of a Foreign Public Official is “an individual who: (a) holds a legislative, administrative, or judicial position of any kind, whether appointed or elected, of a country or territory outside the United Kingdom (or any subdivision of such a country or territory), or (b) exercises a public function: (i) for or on behalf of a country or territory outside the United Kingdom (or any subdivision of such a country or territory), or (ii ) for any public agency or public enterprise of that country or territory (or subdivision), or (c) is an official or agent of a public international organization.”
The FCPA defines a Foreign Official as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof.” Although not defined in the FCPA, “instrumentality” has been defined by a US court as “an entity controlled by the government of a foreign country that performs a function the controlling government treats as its own.”
In simple terms this will include:
• A foreign government employee or someone who acts in an official capacity for a foreign government entity (for example, customs, immigration or tax agency officials, employees of other regulatory agencies, judges, the police, and military).
• Any director, officer or employee of a foreign, state-owned or state-controlled entity, including employees of state-owned banks or merchants (for example, national oil companies, national airlines, railways, and port authorities).
• Any employee, official, or agent of a public international organization, such as the United Nations, the International Monetary Fund, or World Health Organization.
• A foreign politician, political office candidate, or political party official.
• A member of a foreign royal family (other than the royal family in the UK).
• Any immediate family members, such as a parent, child, spouse, or sibling, of any of the above.
The Bribery Act 2010 is not exclusively concerned with the bribery of Foreign Public Officials as its scope also covers the bribery of domestic public individuals and private individuals.
Facilitation Payment: There is no definition of facilitation, or facilitating, payment in the UK legislation, as facilitation payments are not permitted in UK law.
Under the FCPA, there is a very narrowly construed “exception” from the bribery prohibitions for facilitation payments, which are small payments intended to gain access to, speed up receipt of, or secure the performance of, a “routine” (non-discretionary, non-decision-making) governmental action. This exception is a very “gray area,” as these payments are not described with any detail in the FCPA. However, an example would be payments made for a police guard, a small payment to expedite getting otherwise permitted goods through ports/customs, to get the electricity switched on, and so on.
Foreign Corrupt Practices Act (FCPA): A US federal law enacted in 1977 that prohibits US “persons” (which is defined to include not just individuals, but also companies, as well as non-US employees of US companies) from paying bribes to foreign (non-US) government officials or political figures for the purpose of obtaining or retaining business, directing business to another, or otherwise influencing how someone carries out a public or legal duty. There are two main provisions to the Foreign Corrupt Practices Act: the anti-bribery provisions, enforced by the Department of Justice, and the accounting transparency provisions (also called the “books and records” provisions), enforced by the Securities and Exchange Commission (SEC).
Hospitality: Genuine hospitality, promotional, or similar business expenditure that is reasonable and proportionate is regarded under UK anti-bribery guidance as not being caught by the UK anti-bribery legislation. There are, however, difficulties in providing hospitality. Under the FCPA, hospitality (such as paying for meals, travel, lodging, or entertainment) is not prohibited if it is a reasonable and bona fide expenditure, incurred by or on behalf of a foreign official, party, party official, or candidate, and is directly related to the business purpose (promotion, demonstration, or explanation of products or services). the UK anti-bribery guidance states that where it might be thought that the hospitality was really a cover for bribing someone, the UK anti-bribery enforcement authorities would look at such things as the level of hospitality offered, the way in which it was provided, and the level of influence the person receiving it had on the business decision in question. Do remember that taking someone to something (for example a sporting event) counts as hospitality, but arranging for them to go without a company representative would be a gift and possibly subject to different rules. Asking a customer’s family member along to a hospitality event also counts as a gift and is usually not considered part of the permitted hospitality.
Kickback: A form of negotiated bribery in which a commission or other remuneration is paid to the bribe-taker in exchange for an advantage or other services rendered. Generally speaking, the remuneration (money, goods, or services handed over) is negotiated ahead of time. The kickback varies from other kinds of bribes in that there is implied collusion between the “giver” and the “taker” (or agents of the two parties), rather than one party receiving (or soliciting) the bribe from the other. The purpose of the kickback is usually to encourage the other party to cooperate in some illicit or illegal scheme.
Money Laundering: The attempt to conceal or disguise the nature, location, source, ownership, or control of illegally obtained money. Through money laundering, the criminal attempts to transform monetary proceeds derived from criminal activity into funds with an apparently legal source (turning ‘dirty’ money into ‘clean’ money). If illegally obtained money is successfully laundered, criminals maintain control over their illegally obtained funds that they’ve introduced into legitimate financial systems. Money laundering is not limited to cash. Money laundering can be done through any type of financial transaction, including, but not limited to, funds transfers, money orders, checks, debit cards, prepaid products such as stored value cards and other forms of prepaid access, and credit card transactions. AML laws apply to any funds derived from illegal activities, such as funds held by human smugglers, drug traffickers, terrorists, organized crime, tax evaders, and other groups and individuals seeking to transfer, spend, and/or invest money derived from any type of crime.
Politically Exposed Persons (PEPs): Individuals who hold or held a prominent public function, such as the Head of State or government, senior politicians, senior government leader, judicial or military officials, senior executives of state-owned corporations, or important political party officials. The term often includes their relatives and close associates. Banks and other financial institutions are supposed to treat these clients as high-risk, applying enhanced due diligence at both the start of the relationship and on an ongoing basis, including at the end of a relationship, to ensure that the money in their bank account is not the proceeds of crime or corruption.
This content is an extract from the anti Bribery and Corruption booklet.