Multinational companies have spent millions of dollars beefing up their compliance programs amid a U.S. crackdown on foreign bribery. Now, they are facing a new British law they fear will force them to rethink their compliance strategies and upend their business practices.
The new law, called the Bribery Act, takes effect in April. It resembles the U.S. Foreign Corrupt Practices Act, which bars companies that trade on U.S. exchanges from bribing foreign government officials to gain a business advantage.
The British law, however, is more sweeping than its American counterpart, and corporate legal advisers are uncertain how extensive the fallout might be.
“There are a lot of people saying this is the FCPA on steroids,” says Mark Mendelsohn, a Washington lawyer who oversaw FCPA prosecutions at the U.S. Justice Department from 2005 until earlier this year. Mr. Mendelsohn is now a partner at corporate-defense firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Legal experts say it isn’t clear how vigorously the law will be enforced or what resources Britain will commit to investigating or prosecuting suspected violations. But that point has done little to reduce the trepidation among corporate counsels.
