This is the third offense established by the Act and relates to a specific activity. To constitute an offence, the intention must be to influence an official in his/her capacity as a foreign public official to obtain or retain business, or an advantage in the conduct of business. It may be directly or through a third party. The bribery of foreign public officials as proscribed under this Act is similar to actions of bribery prohibited under the FCPA.

This is an offense that may be committed by commercial organisations and not individuals. A relevant commercial organisation[2] will be guilty of an offence under this section, if it does not put systems in place to prevent corruption in its operation. Often action regarding this offense is activated if a person or a business associated with the UK or its agents bribes another person with the intention to obtain or retain business or to obtain or retain an advantage in the conduct of business for the relevant commercial organisation. Therefore, a company indicted under Sections 1 or 2 of this Act, may be held liable for failing to prevent bribery in its operations. The fundamental effect of this section is that it imposes an obligations for companies to implement measures that seek to prevent bribery, and a strict liability for failing to implement such measures, in which case a company found complicit in bribery will also bear full responsibility for this third offence unless and except it can show that the bribery occurred despite adequate measures it has put in place to prevent it.
Thus, it a good defense for a related company to argue that it has adequate measures in place to prevent bribery both at the head office and at its subsidiaries, and that third party organisations or Joint venture partners are aware of these procedures. So evidence that a company has effective control of its subsidiary, regardless of the location of the subsidiary or the nationality of its decision-making management, will indicate that adequate procedure for preventing bribery implemented in that company should equally apply to the subsidiaries.

A & E Law Partnership, a development law firm based in Abuja, Nigeria has entered into a strategic alliance for facilitating transnational legal practice and business relationships between Nigeria and Turkey with the signing of an Affiliate Agreement with Katar & Partners Law Firm based in Istanbul Turkey on the 20th of May 2015. The Affiliate agreement was signed by Mr. Mehmet Katar on behalf of Katar & Partners and Mr. Chibuzo Ekwekwuo on behalf of A & E Law Partnership and witnessed by Partners and members of staff of both firms.
The Principal Partner of A & E law firm, Chief Steve Ahaneku who chaired the historical meeting between the firms highlighted the many opportunities Nigeria has to offer potential investors whilst noting that the relationship between the two law firms will facilitate and support improved partnerships between Turkish and Nigerian businesses and help clients achieve improved regulatory compliance with Nigerian and Turkish Laws.

 

 

 

 

Partners and Associates of Katar & Partners and A&E Law Partnership after signing the agreement on 20th May 2015

The Serious Fraud Office (SFO) is responsible for enforcement of the UK Bribery Act, and it has the power to prosecute the following persons for engaging in acts of bribery;
Relevant commercial organisation which refers to either;
A body incorporated, or partnership formed, under the law of the UK and carries on a business anywhere, ie within the UK or elsewhere, e.g. Securency International PTY Ltd (“Securency”) is an Australian joint venture company co-owned by the Australian Reserve Bank and Innovia Films, a UK packaging company. The SFO has enforced the provisions of the UK bribery Act against Securency because 50% of Securency is owned by a UK Company[4] for allegedly paying bribes between 1999 and 2005 to public officials in Indonesia, Malaysia and Vietnam to secure banknote contracts;[5] or
A body incorporated, or partnership formed, anywhere which carries on any part of its business in the UK; this option specifically affects foreign companies operating worldwide. However, the phrase ‘any part of its business in the UK’ is broad and unspecific. Transparency International (UK) Adequate Procedure – Guidance to the UK Bribery Act 2010[6] makes reference to having a representative office in the UK or UK agent as sufficient to fulfill the condition of ‘any part of its business in the UK’. So how can the SFO interpret the phrase ‘any part of its business in the UK’ in order to secure grounds to prosecute foreign companies under the Act.
An associated person – the employee, subsidiary, intermediary or supplier of an organisation, someone who performs or provides services for or on behalf of the organisation; e.g. The SFO in 2011 charged William Lowther, OBE, CBE, a former deputy chairman of Securency for bribery offences. He while working for Securency allegedly funded a degree at Durham University for the son of the Governor of the State Bank of Vietnam as part of the Securency’s conspiracy to bribe officials in Vietnam to secure banknote contracts.[7] It is however pertinent to note that William Lowther was charged on UK old Anti-corruption legislation as the incident occurred before the Bribery Act came into force. Although if the Act was in place at the time the incident occurred, he could have been charged for bringing a foreign government official.
Any director and senior officer of the company where bribes are given and received by a body corporate with the consent or connivance of the director or senior officer. Note, where bribery occurred wholly outside the UK, the director may only be prosecuted if he or she has a close connection with the UK. Close connection is a terminology applied to certain category of individuals – “British citizen, British overseas territories citizen, British National (Overseas), British Overseas citizen, person who under the British Nationality Act 1981 was a British subject, British protected person within the meaning of that Act, an individual ordinarily resident in the United Kingdom, a body incorporated under the law of any part of the United Kingdom, a Scottish partnership”; e.g. in the Securency International PTY Ltd case, earlier mentioned, following an investigation into allegations that Securency paid bribes in order to secure contracts for supply to the Nigerian Security Minting and Printing Company (NSMPC) of a product called polymer substrate on which bank notes are printed, the SFO sought the cooperation of the Economic and Financial Crimes Commission (EFCC) to secure the extradition of a dual Nigerian and British national, Mr. Emmanuel Okoyomon, the former Managing Director of NSMPC to the UK. The EFCC through the Attorney General of Nigeria secured an order of a Federal High Court on the 4th of May 2015 to facilitate the extradition of Mr. Okoyomon to face bribery charges in the UK.[8] Nonetheless, if the bribery incident had occurred in the UK, the close connection element will not apply and any director or senior officer(Foreign or British) engaged in bribery can be prosecuted under the Act,
A UK registered partnership.
A foreign company that carries on any part of its business in the UK even where the bribery takes place wholly outside the UK and the benefit or advantage to the company is intended to accrue outside the UK; e.g., in 2013, Eurasian Natural Resources Corporation Plc (ENRC Plc) faced potential prosecution by SFO for alleged fraud, bribery and corruption relating to the activities of the company or its subsidiaries in Kazakhstan and Africa.[9] ENRC Plc is a Kazakhstan Company[10] that until it voluntarily de-listed in November 2013, was quoted on the London Stock exchange. ENRC Plc was involved in a series of rapid acquisition of mining assets in the Democratic Republic of Congo (DRC) using opaque offshore structures. ENRC made large payments to offshore companies to purchase prize mining assets in Congo, which were acquired at significantly undervalued prices. According to an article by Global Witness,[11] the structure of these deals meant that the Congo, which had one of the lowest GDP per capita in the world in 2013,[12] may have foregone hundreds of millions of dollars in revenue. Many of ENRC’s mining deals in Congo involved companies registered in British overseas territories of the British Virgin Islands and Gibraltar.
From the list of persons enumerated above, the Act appears to be broad in terms of its extra territorial jurisdiction. This is because there is a heighten risk that both UK companies, foreign companies and persons associated with it, may be liable for failing to prevent bribery even when the incident occurs overseas, but most especially where it occurs in the UK. There is also the fact that the Bribery Act imposes a strict liability for the offence of failing to prevent bribery where the only defence is that anti-bribery measures are in place within the company. It therefore behooves on both UK registered companies and foreign companies to review their business practice and bring these in tandem with the Act.
In conclusion, it should be noted that companies registered in the UK and particularly those doing business in countries in the third world (or any other countries) and the persons associated with these companies (local citizens and businesses in these foreign countries) stand a chance of being prosecuted under the UK Bribery Act where they engage in bribery. However, one clear distinction between the FCPA and UK Bribery Act is that while the FCPA has one major offence of bribing foreign public officials, the Bribery Act has divided its offences into four inclusive of the bribery of foreign officials.
In the next article, we shall examine in detail the four categories of offences covered by the UK Bribery Act.
Chibuzo Ekwekwuo and Uchechi Dibiaezue (Mrs.) of A & E Law Partnership

Introduction
The brief historical background to the enactment of the FCPA and the kinds of persons directly affected by the anti-bribery provisions of the act, which was discussed in the first article in this series, indicated the reason for its enactment, as well as the importance of these provisions to covered companies operating worldwide. In the second article, we dealt with actions prohibited by the FCPA, and in addition briefly explained the types of business practices that are acceptable under the Act. In the third, we addressed the defences a company can raise to an allegation of breach of the FCPA and outlined some measures that can be implemented to ensure compliance with the FCPA. In this last and concluding article, we would reiterate further the importance of the FCPA by discussing the implications to a local company, where their affiliate covered companies are subject of FCPA proceedings as a result of the local company’s actions.
Consequences of FCPA Proceedings
Generally, covered companies under the FCPA are discouraged from breaching the provisions of the Act by the huge penalties they bear as a result of their actions. The major highpoint of the penalties imposed is its retributive nature. The penalties that a company undertakes for breaching the anti-bribery provisions of the FCPA is greater than the profit gained from engaging in bribery. The penalties imposed usually encompass the disgorgement of the illicit payments made, a pre-judgment interest on the sum and a penalty sum; e.g. in the Bukker case reported in the 3rd Article in this series. In that case Bukker Corporation realized approximately $1.7 million in profits from sales contracts with state-owned entities in China whose officials received improper payments from the company. To settle the charge, the company agreed to pay $1,714,852 in disgorgement, $310,117 in prejudgment interest, and a $375,000 penalty. The total amount paid out in the settlement was approximately $2.4 million more that the benefit that accrued to the company from the profit.
Therefore, for local companies operating in Nigeria and other jurisdictions, the following points should be noted;
• Local companies in jurisdictions outside the US are not necessarily exempt from enforcement action by SEC under the FCPA. Under federal law, individuals or companies that aid or abet a crime, including an FCPA violation, are as guilty as if they had directly committed the offense themselves. Thus, a local company may still bear consequences for engaging in acts of bribery as a covered company.[1] In the Halliburton bribery scandal case reported in Articles 1 and 2 respectively, Halliburton faced enforcement action by SEC under the FCPA.
However Snamprogetti Netherlands BV, a dutch company and a subsidiary of ENI S.P.A. an Italian company was also found to be culpable in partaking in the bribery incident between KBR Inc & Halliburton and the Nigerian government officials. As a result, Snamprogetti Netherlands BV and ENI its parent company agreed to jointly pay $125 million in disgorgement. Snamprogetti faced a separate criminal charge by the Department of Justice (DOJ) for conspiracy to breach the FCPA and of aiding and abetting violations of the anti-bribery provisions of the FCPA. Snamprogetti agreed to pay a criminal penalty of $240 million for this charge.[2]
• Foreign nationals and company subsidiaries or agents to US covered companies, may also be liable for conspiring to violate the FCPA—that is, for agreeing to commit an FCPA violation—even if they are not, or could not be, independently charged with a substantive FCPA violation; e.g. In November 2010, the DOJ charged Panalpina World Transport (Holding) Ltd., a global freight forwarding and logistics services firm based in Basel, Switzerland, and its U.S.-based subsidiary, Panalpina Inc., for engaging through subsidiaries and affiliates (collectively “Panalpina”), in a scheme to pay bribes to numerous foreign officials on behalf of many of its customers in the oil and gas industry. Panalpina admitted that it paid bribes to foreign officials in at least seven countries, including Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan. Panalpina’s customers, including Shell Nigeria Exploration and Production Company Ltd. (SNEPCO), Transocean Inc. and Tidewater Marine International Inc., admitted that they approved of or condoned the payment of bribes on their behalf in Nigeria and falsely recorded the bribe payments made on their behalf as legitimate business expenses in their corporate books, records and accounts. These three companies were charged with conspiring to violate the anti-bribery and books and records provisions of the FCPA, violating the anti-bribery provision of the FCPA and with aiding and abetting a violation of the books and records provisions.[3]
• Under certain circumstances, a foreign company could also be held liable for the domestic concern’s substantive FCPA violations based on the Pinkerton v. United States case.[4] This case imposed liability on a defendant for reasonably foreseeable crimes committed by a co-conspirator in furtherance of a conspiracy that the defendant joined. In conspiracy cases, the US law is that it has jurisdiction over all the conspirators, where at least one conspirator is an issuer, domestic concern, or commits a reasonably foreseeable overt act within the United States.
• Where a local company for whatever reason is not to be prosecuted under the FCPA, it is unlikely that the covered company prosecuted under the Act will continue to do business with that local company found culpable in the act of bribery. Image and reputation is an essential part of international business transactions and no company wants to associate with a local entity known for questionable business conduct. Certainly the DOJ will frown at such conduct by a covered company. This is important as companies found guilty under the FCPA are mandated to permanently cease and desist from committing or causing any violations and any future violations of the Act.
• There is also the issue of loss of business, NGO’s, multinational corporations and even other local businesses will not want to have future dealings with local companies of ill repute, individuals or companies found complicit in FCPA violations. Often the requirements for detailed due diligence by covered companies and their affiliates will detect such complicity and certainly lead to loss of business for any companies or even professional practice or other business found complicit.
• Unnecessary publicity as a result of criminal conduct is bad for business, and heightened press focus will scare investors or lead to withdrawal of patronage.
• Other ethical issues may come under the spotlight as an allegation of crime may lead other third party organisations to probe the business transactions of such local companies acting for and on behalf of companies covered under the FCPA, where enforcement action has been instituted by SEC against their covered company affiliates e.g. questions like what are the directors’ remuneration, corporate taxation, whether forced labour was used, trafficking and child protection may become subjects of new investigations by local authorities, NGOs etc . These are all contemporary issues of interest worldwide.
• Local companies or agents also leave themselves open to criminal prosecution by individual governments for incidents of bribery carried out by the company; e.g. China imposed a £297 million pounds fine on GSK for bribery. [5] However, in the Halliburton bribery scandal case, the public officers and their local agents are yet to be prosecuted under Nigerian law, despite the obvious breaches.
It should be noted that there is an enforcement division of SEC which works with the commission to investigate and prosecute companies that have breached the FCPA. This division also works with law enforcement agencies in the US and around to world to bring criminal cases up for prosecution. It may take some time to privately conduct investigations, develop the facts, interview witnesses, examine all relevant records, but the SEC and the DOJ continue to bring enforcement actions yearly against those that breach the FCPA.
In conclusion, we affirm that such local affiliates of covered companies can be subject of FCPA sanctions. Also, they can be tried for conspiracy, aiding and abetting such crimes, and where they are not so charged or sanctioned; related press attention, and attention of local criminal investigation bodies, or NGOs, loss in reputation and business that may result from SEC proceedings against their parent or affiliate covered companies in the US may exert huge business costs and therefore are good reasons for such local companies or individuals to take all necessary steps not to participate in FCPA violations.
By Chibuzo Ekwekwuo and Mrs Uchechi Dibiaezue
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[1] This has been defined in article 1; see who can be prosecuted under the FCPA.
[2] SEC Charges Italian Company and Dutch Subsidiary in Scheme Bribing Nigerian Officials with Carloads of Cash http://www.sec.gov/news/press/2010/2010-119.htm accessed 23 February 2014.
[3]http://www.justice.gov/opa/pr/oil-services-companies-and-freight-forwarding-company-agree-resolve-foreign-bribery accessed 25 February 2015.
[4] Pinkerton v. United States, 328 U.S. 640, 647-48 (1946)
[5] http://goodcorporation.com/news/anti-corruption-white-paper-published-by-goodcorporation/accessed 24 February 2015.