Bribery Act 2010, UK Criminal Finances Act 2017 And Economic Crime And Corporate Transparency Act 2023 Flashcards
The Bribery Act 2010 came into force on 1st Jul 2022. It replaces the old laws and bribery with a new anti-bribery code.
What are the four main offences under the Bribery Act 2010?
- Paying Bribes – It is illegal to offer or give money, gifts, or any other advantage to influence someone improperly in their job or duty.
Eg: A company gives a government official an expensive gift to secure a contract.
2 Receiving Bribes – It is illegal to ask for or accept a bribe in exchange for improperly carrying out a duty.
Eg: A procurement manager demands cash from suppliers in return for awarding contracts.
- Bribing Foreign Officials – Special rules apply to bribery involving foreign public officials, especially where a payment or advantage is given to gain a business advantage.
Eg: A UK company pays an overseas customs official to speed up the processing of shipments. - Failure to Prevent Bribery (Corporate Liability) – A company can be guilty if someone acting on its behalf (an employee/ agent/ subsidiary) commits bribery, unless the company can prove it had “adequate procedures” to prevent it.
Eg: A sales agent of a UK company offers bribes to foreign officials to secure a contract, and the company had no proper anti-bribery policies in place.
What is a “Relevant function or activity” under the Bribery Act 2010?
- Includes public functions and business-related activities.
- The person performing it must act honestly, impartially, or in a position of trust.
- Improper performance is judged by what a reasonable person in the UK would expect. We look at breaches of expectation when compared to a reasonable person
- The function/activity does not need to be connected to the UK.
What is the most important change that was introduced in The Bribery Act 2010 that wasn’t there in the previous legislation?
- Companies must have anti-bribery procedures in place. (Applies to only commercial organisations like companies and partnerships)
- A company can be guilty if:
A. An employee, agent, or third party commits bribery to gain a business advantage.
B. The company cannot prove it had adequate anti-bribery procedures to prevent bribes being paid.
What are the differences between the old and new law for anti-bribery?
New legislation is Bribery Act 2010
Highlight the differences with regards to company responsibility
- Old Law: A company was guilty only if senior management was involved in bribery.
- New Law: A company can be guilty even if no senior manager knew about the bribery.
Under the new anti-bribery laws (Bribery Act 2010) - a company may be guilty even if nobody in the company knew of the bribery
What is the only defence the company can use in the situation under the new law?
- A company can avoid liability only if it proves it had strong anti-bribery procedures.
- This puts pressure on companies to ensure that their anti-corruption procedures are robust to stop any employees, agents or other third parties acting on the corporate‘s behalf from committing bribery.
- The government provides guidance on what counts as “adequate procedures.”
- The courts will decide whether a company’s procedures were strong enough.
What are the penalties if an individual or a company is convicted of bribery under the Bribery Act 2010?
- Individuals convicted of bribery can face up to 10 years in prison.
- Companies failing to prevent bribery can receive an unlimited fine.
The UK Criminal Finances Act 2010
What is the main purpose of this act?
- What is it?
A law to tackle corruption, money laundering, and tax evasion. - Who does it apply to?
Criminals, financial institutions, corporations, and anyone involved in financial crime. - What does it involve?
Makes it easier to seize illegally obtained money and increases corporate responsibility for preventing financial crime.
The UK Criminal Finances Act 2010
The first key change introduced in this act is “ improved ability to investigate the proceeds of crime”.
What does this exactly mean and include?
- What is it?
Enhanced powers to investigate suspicious wealth. - Who does it apply to?
High-net-worth individuals, politically exposed persons (PEPs), and suspected criminals. - What does it involve?
A. Unexplained Wealth Orders (UWOs): Forces individuals to explain how they acquired expensive assets.
B. Further Information Orders:
Authorities can request more details about suspicious transactions.
C. Application to PEPs:
Targets high-risk political figures suspected of money laundering.
The UK Criminal Finances Act 2010
The second key change introduced in this act is “ reform of the Suspicious Activity Reports (SAR) regime”.
What does this exactly mean and include?
- What is it?
A system to report suspected financial crime. - Who does it apply to?
Banks, financial institutions, and regulated businesses. - What does it involve?
A. Super SARs:
Allows multiple businesses to submit a joint report on suspicious activity.
B. Extended Moratorium Period:
Freezes suspicious transactions for up to 7 months to allow further investigation.
The UK Criminal Finances Act 2010
The third key change introduced in this act is “ improved civil powers to recover proceeds of crime”.
What does this exactly mean and include?
- What is it?
Stronger powers to seize illegally obtained money and assets. - Who does it apply to?
Banks, financial institutions, and individuals with criminal wealth. - What does it involve?
A. Seizing bank account funds linked to crime.
B. Confiscating personal property obtained through illegal activity.
The UK Criminal Finances Act 2010
The fourth key change introduced in this act is “measure to combat terrorist financing”.
What does this exactly mean and include?
- What is it?
Expands anti-money laundering rules to cover terrorism funding.
2 Who does it apply to?
Individuals, charities, and financial institutions suspected of financing terrorism.
- What does it involve?
A. Identifies and blocks transactions that could fund terrorist activities.
B. Strengthens enforcement against organizations handling terrorist-linked money.
The UK Criminal Finances Act 2010
The fifth key change introduced in this act is “ new corporate tax offences to prevent the facilitation of tax evasion”.
What does this exactly mean and include?
- What is it?
A company can be prosecuted if someone within it helps a person evade UK tax. - Who does it apply to?
UK companies, employees, accountants, and financial advisors. - What does it involve?
A. The company is guilty if it cannot prove it had procedures to prevent tax evasion.
B. Failure to Prevent Facilitation of Foreign Tax Evasion
I. Expands liability to UK-related entities that facilitate foreign tax evasion.
II. Applies to companies with a UK presence (e.g., offices, branches).
III. Companies involved in dual criminality (i.e., the tax offence must be illegal in both the UK and the foreign country).
IV. Allows UK authorities to prosecute businesses even if the tax crime happened abroad.
The Economic Crime and Corporate Transparency Act 2023
What is the purpose of this act?
- It’s a major reform in the UK’s approach to tackling financial crime, fraud, and corporate transparency.
- Applies to UK businesses, financial institutions, corporate entities, and law enforcement agencies.
- Involves strengthening anti-money laundering, fraud prevention, and corporate transparency rules.
The Economic Crime and Corporate Transparency Act 2023
This act covers a number of areas, including changes to Companies House that improve transparency over UK entities.
What do these changes include with regards to the Companies House?
- What is it?
Reforms Companies House to improve transparency over UK businesses. - Who does it apply to?
All UK companies and corporate entities. - What does it involve?
A. Creates a more reliable and transparent company register.
B. Prevents bad actors from using opaque corporate structures to hide money and move illicit funds.
The Economic Crime and Corporate Transparency Act 2023
The Act allows for Increased Investigative Powers for Law Enforcement.
What does this exactly mean and include?
- Gives more power to authorities to investigate financial crime.
- Who does it apply to?
Businesses, individuals, and organisations suspected of financial crime. - What does it involve?
A. National Crime Agency (NCA):
Can now force businesses to hand over information related to money laundering and terrorist financing.
B. Serious Fraud Office (SFO):
Gains expanded powers to demand pre-investigation information from individuals and companies to speed up investigations.
The Economic Crime and Corporate Transparency Act 2023
What is the new corporate criminal offence for “large organisations” that was introduced as part of this act?
- What is it?
A new corporate criminal offence for large organisations that fail to prevent fraud. - Who does it apply to?
A. Large organisations (UK companies and partnerships) that meet two out of three of the following criteria:
I. More than 250 employees
II. Turnover exceeding £36 million
III. Balance sheet total over £18 million - What does it involve?
A. If an employee, agent, subsidiary, or anyone acting on behalf of the company commits fraud, the company can be held liable.
B. The company does not need to prove that senior management ordered or knew about the fraud.
C. The only defence is proving that reasonable fraud prevention procedures were in place. - Penalty:
Companies found guilty face unlimited fines.
