A new combatant in the fight against corruption has been added to the US Foreign Corrupt Practices Act and the OECD Anti-bribery Convention. Britain's parliament has just passed a tough new bribery law, to come into force later this year.
The law is widely seen as a response to the UK Serious Fraud Office's investigation into BAE Systems past activities in Central Europe. It is relevant to Romania.
The Bribery Act 2010 is aimed in particular at preventing bribery of foreign officials deciding upon high value transactions - such as procurement of supersonic aircraft, the construction of motorways and the upgrade of power plants. The law's jurisdiction could not be wider. It covers all British citizens and companies, wherever they operate, as well as all companies operating in the UK, wherever they are incorporated. The law applies to any person "closely connected with the UK" who commits an offence wherever that may occur.
The law clearly applies to a great many European firms and individuals, including Romanian. It introduces a new offence of corporate failure to prevent bribery. A company will be held responsible for bribery committed by anyone acting on its behalf, employee, agent or subsidiary. The offence of failing to prevent bribery is "strict liability", by which is meant that failure to put in place "adequate procedures" will result in prosecution, regardless of whether prosecutors can show corrupt intent.
So the management of a Romanian company located in Britain unable to demonstrate that it had adequately examined the records of its Romanian agents in Bucharest or elsewhere would be liable for offences committed by them. The penalties include unlimited fines or imprisonment for up to 10 years.
The Bribery Act is criticized by some, who claim that it puts firms at a competitive disadvantage. They are right, at least in the shor
