Case Study Bribery - Coursework Example

Case study bribery Case study 18: Managing the Risk of Global Bribery in Business Differences between theprovisions of the United States Foreign Corrupt Practices (FCPA) Act and the United Kingdom Bribery Act The UK bribery Act is more consolidated and broad in nature than the FCPA since the FCPA focuses on the bribery of public officials unlike the UK bribery Act that covers all forms of bribery including bribery of private individuals. The bribery Act goes further to ban the actual or attempted bribery of individuals and also the receipt of bribes unlike FCPA that has no such provisions and covers only active bribery.

The bribery Act creates a corporate offence which is a strict liability offence for corporations that fail in prevention of bribery thus such companies are liable if its authorized officials commit a bribery act unlike FCPA that does not outline a strict liability offence for corporations. Under the FCPA, there must be a proof of corrupt intention, but the bribery Act is stringent since there is no requirement for improper intent as such situations constitute general bribery offence. The FCPA creates certain loopholes that make companies engage in corruption since companies are allowed to incur promotional expenses that may either be in the form of gifts, entertainment or incentives in order to secure contracts.

However, the UK bribery act does not make an exemption for promotional expenses. Why companies have been accused of violating the Foreign Corrupt Practices Act in the recent past There are various reasons why companies have continued to violate the FCPA in the recent past such as the poor prosecution abilities, the loopholes inherent in the Act and unethical corporate governance practices in the US. Some of the companies that have been charged by the Securities Exchange Commission (SEC) in the recent past for engaging in bribery include BHP Billiton, Goodyear Tire and Rubber Company, Avon Products Inc, Bruker Corporation and Hewlett-Packard.

The companies have exploited the weak foreign legislation on bribery and the exemption on promotional expenses that is created by the FCPA to engage in acts of bribery. The FCPA has limited territorial reach and may fail to apply in some cases when the bribery act takes place outside the US borders. Another reason for this bribery trend is the less severe criminal penalties for bribery since prosecutors have imposed small company fines for violation and up to five years imprisonment. The difficulties experienced in determining when a minor gift, entertainment or incentive constitutes a bribe There are difficulties experienced in determining when a minor gift, entertainment or incentive constitutes a bribe since the anti-bribery law allows for companies to incur promotional expenses which are reasonable and bona fide expenditures related to a contract.

The provision for making small gifts or incentives constitutes an important aspect of cultivating meaningful and long-term business relationships and thus prosecutors should examine the business context and reasonableness of the small gifts or incentives in determining whether they constitute acts of bribery. The small gifts or incentives are usually recorded in company records and do not constitute anti-competitive behavior thus making it difficult to term them as bribery since they may be recorded as facilitation payments or promotional expenses that have been incurred in pursuing legitimate interests of the company.

Conclusion The UK bribery Act is more detailed than FCPA in curbing bribery since it covers both public officials and private individuals. The UK bribery act applies to both active and passive bribery and does not provide for exemptions on promotional expenses and facilitation payments unlike the FCPA.