MANAGING THE RISK OF GLOBAL BRIBERY IN BUSINESS

What are the differences between the provisions of the United States Foreign Corrupt
Practices Act and the United Kingdom Bribery Act?

U.S. Foreign Corrupt Practices Act (FCPA) and U.K. Bribery Act are the two most
important and encompassing regulations forbidding companies with operations in those
countries from bribing employees in foreign governments for obtaining any favors.

In general, both FCPA and U.K. Bribery Act are similar but there are considerable
differences between the two as below.

- The U.K. Bribery Act is more comprehensive than FCPA. First of all U.K. Bribery Act
prohibit private to private bribery as well as bribing to foreign public officials which
means that even if the person who is offered the bribe is not a government official,
the employee/employer offering the bribe and the company will be liable under U.K.
Bribery Act.

- The FCPA does not make illegal to make facilitation payments while U.K. Bribery Act
has not even tolerated facilitation payments. Since, in some countries small
expenditures as gifts or small payments as facilitation payments, also known as
“speed money” in third world countries, may be necessary to get government
permits and approvals, the U.K. Bribery Act harshness is criticized and expected to
tolerate small payments. In last years, no investigation based on facilitation
payments was conducted but still the content of the Act has not changed.

- FCPA is focusing more on the accounting treatment of such expenditures and the
intent of the company. The U.K. Bribery Act on the other hand, focuses on the ethics
of the companies and makes mandatory for these companies to have adequate
controls for preventing bribery in their foreign operations, thus the intent of the
company does not have role in investigations conducted under U.K. Bribery Act and
third party applications should be closely monitored so that companies are not
penalized.

- The fines and imprisonment periods are stricter under U.K. Bribery Act compared to
the fines and penalties under the FCPA.

Check for more recent situations where companies have been accused of violating the
Foreign Corrupt Practices Act. Why do you think these companies chose to engage in
bribery?

In January 2020, Airbus, a global provider of civilian and military aircraft based in France,
has agreed to pay combined penalties of more than $3.9 billion to resolve foreign
bribery charges with authorities in the United States, France and the United Kingdom
arising out of the Company’s scheme to use third-party business partners to bribe
government officials, as well as non-governmental airline executives, around the world
and to resolve the Company’s violation of the Arms Export Control Act (AECA) and its
implementing regulations, the International Traffic in Arms Regulations (ITAR), in the
United States.  This is the largest global foreign bribery resolution to date.

Also in June 2020, Greece subsidiary of Novartis AG, a Switzerland-based global

pharmaceutical company, and Alcon Pte Ltd, a former subsidiary of Novartis AG and
current subsidiary of Alcon Inc., a multinational eye care company, have agreed to pay a
combined total of more than $233 million in criminal monetary penalties to resolve the
department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA)

In my opinion, most of the companies choose to attempt bribery in order to be more

advantageous than their competitors and/or to possess permits of different
governments. All of these companies are well known and trusted companies and their
goal is to be able to continue conduct their business in a more profitable way. They do
know that bribery is illegal and punishments and fines may destroy the trust of the
public and their reputation but they however choose to take the risk. They may even
think that they can handle the punishments and fines. Therefore, it may be considered
to amend those regulation in order to increase the penalties to prevent such behavior.

Why is it so difficult to determine when a minor gift, entertainment, or incentive

constitutes a bribe?

It is so difficult to determine when a minor gift, entertainment or incentive constitutes a

bribe because first of all the form and frequency of bribery vary depending on the
culture. In some cultures, bribery is a common way of doing business and even
regulations like FCPA does allow companies to provide hospitality or small gifts. But
when a gift will be against the regulation than? This may change from taste to taste and
culture to culture and even wages to wages. A gift may be a bribery for a junior but the
same gift may not be a bribery to a senior. Some says that reciprocity must be
considered in such situations however it is not the only way to determine it. In any way,
it is sure that if a gift changes the public official’s opinion it must be deemed as a
bribery. In order to refrain this ambiguity, companies must include these situations into
their code of conducts. By implementing a code of conduct with clear distinctions
between bribery and gifts or entertainment, a company can set a proper precedent that
bribery will not be tolerated..