FCPA compliance alone is not sufficient

FCPA compliance alone is not sufficient


Author: Ron Reid

Recent research amongst UK businesses has shown them to be complacent about compliance with the UK Bribery Act.

It is unlikely that organisations based outside the UK, but who have businesses or subsidiaries based in the UK, are any better at Bribery Act compliance.

The root cause of this situation is a failure to fully understand how the UK legislation differs from the US Foreign and Corrupt Practices Act (FCPA).

Many companies have had in place for many years compliance programmes based on the FCPA. They have often failed to appreciate the very important differences between the two pieces of legislation.

Put simply, FCPA compliance alone will simply be insufficient.

For a detailed comparison of the differences between the UK and US legislation, see our previous article: A comparison between UK Bribery Act and the FCPA

The Serious Fraud Office (SFO), which is responsible in the UK for enforcement of the legislation, recently indicated its intention to pursue a more aggressive crime-fighting strategy.

Its incoming new director David Green has indicated that unlike his predecessor, he will be less willing to do deals with companies that discover and self-report breaches of the legislation, which had previously led to civil settlements rather than criminal prosecutions.

With the Organisation for Economic Co-operation and Development (OECD) having criticised the UK for the secrecy surrounding such SFO agreements - stating that 'justice must be seen to be done' - the pressure is on to bring prosecutions.

As the Act is enforceable against any non-UK domiciled commercial organisations which do business in the UK, they would be well advised to review their policies to ensure they do not become the target of this more aggressive enforcement strategy.