Authorities ramp up enforcement of foreign companies’ non-compliance with national anti-bribery laws

In recent years, multinationals have increased their efforts to mitigate the risk of commercial bribery in particularly given the wide-reaching applicability of the UK Bribery Act.

The prosecution of commercial bribery has once again become a key issue following the amendment of the Anti unfair Competition Act (AUCA). With the restructuring of the act’s anti-bribery provision, which dovetailed with the national anti corruption movement, the government appears to be cracking down on unlawful commercial activities by both domestic and foreign companies.

Foreign companies’ compliance with anti-bribery laws is set to become as big a focus area as domestic companies compliance with foreign laws.

What constitutes commercial bribery under AUCA?

The AUCA defines ‘commercial bribery’ as “using money, things of value, or other means to bribe with the purpose of obtaining transactional opportunity or competitive advantage”. Possible recipients of unlawful commercial bribery under the AUCA are limited to:

  • the employees of a counterparty to a transaction;
  • organisations or individuals entrusted by a counterparty to a transaction to handle relevant matters; and
  • organisations or individuals that use their power to influence a transaction.

In this sense, the AUCA not only includes counterparties as potential recipients for commercial bribery purposes, it also prohibits the provision of discounts to counterparties or the payment of commission to intermediates unless the discount or commission is offered and accepted in accordance with the agreement and in an honest manner. In addition, where commercial bribery by an employee is demonstrated, the AUCA requires the employer to prove its irrelevance; otherwise, the employer is liable.

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