Voters in the UK produced an unlikely result by failing to deliver a clear majority to any one party in the May 6, 2010 general elections. The resulting “hung Parliament” —the first since 1974—has resulted in the creation of a coalition government between the Conservative Party and the Liberal Democrats, with the Conservative Party’s David Cameron serving as the UK’s new Prime Minister. This change of power from the Labour party has any number of political implications in the UK and beyond, including the opportunity for a new government to determine key aspects of when and how the new UK Bribery Act 2010 will be implemented.
The Act received Royal Assent on April 8, 2010, but two critical steps must be completed before the Act can take effect. First, the Act’s commencement date must be determined by a new Ministry of Justice, which will be appointed by the new government. Second, the Ministry of Justice must provide guidance as to what constitutes adequate anticorruption procedures, pursuant to the mandate of Section 9 of the Act. The government committed to providing this guidance before the new offenses under the Act take effect to give commercial organizations adequate time to address any potential shortcomings in their internal compliance functions.
At the February 2, 2010 third reading of the Bill before the House of Lords, Lord Tunnicliffe indicated that the Ministry of Justice had already begun working closely with business groups and non-governmental organizations to develop a set of principles to serve as the basis of the guidance document. However, the guidance consultation and development process was stayed during the election. If Labour had won a majority, it was anticipated that the Act would take effect in October 2010, following a July 2010 release of the guidance required by Section 9. The Conservative/coalition victory may result in commencement being delayed until 2011 as the new Ministry of Justice prepares the guidance required by Section 9. This could include a new round of consultations with businesses and other relevant entities.
While awaiting news regarding the commencement of the Act, UK businesses and U.S. businesses operating in the UK have the opportunity to begin assessing their compliance programs and identifying the changes necessary to ensure compliance with the Act and the ability to take full advantage of its “adequate procedures” defense.
More information about the Act, including its new offenses and how it compares to the U.S.’s Foreign Corrupt Practices Act, can be found in McGuireWoods’ white paper Understanding the UK Bribery Act.