Colombia and the United Kingdom have recently introduced broad new laws that strengthen their anti-corruption regimes and increase penalties. These initiatives were apparently not coordinated, but many businesses in Colombia may be affected by both new laws.

Colombian Law 1474, 2011 ("Law 1474") became effective on July 12, 2011, and strikes at the pervasive corruption in the Colombian public contract process. Law 1474 focuses largely on corrupt transactions between Colombian (or foreign) individuals/companies and Colombian public entities and their employees. Additionally as an attempt to avoid corruption at all levels, Law 1474 also prohibits the bribery of private persons in Colombia and the bribery of foreign public officials.  

The UK Bribery Act 2010 (the "Bribery Act") became effective on July 1, 2011, after a long, controversial and delayed legislative process.  It puts the UK on the "bleeding edge" of international efforts against corruption, but is perceived to be unusually strict, and therefore has the risk of affecting UK business competitiveness. The Bribery Act is similar to the US Foreign Corrupt Practices Act (the "FCPA") because it applies to certain non-UK commercial organizations and to conduct occurring anywhere in the world, including in Colombia. Much of the Bribery Act's notoriety comes from criminalizing private sector bribery and a strict liability offence for failing to prevent bribery.

Neither the Bribery Act nor Law 1474 excludes facilitation payments, which are small payments or gifts to secure or reward performance of a public official's legitimate functions.  This is a significant and unwelcome departure from the FCPA. 

Colombia focuses on Domestic Public Officials

Law 1474 prohibits:   

• Individuals/corporations involved in acts of corruption (such as bribery, fraud, embezzlement, terrorism and drug trafficking) from entering into public contracts with any Colombian public entity for up to 20 years.
• Entering into a contract with a government entity where any candidate financed by the contracting individual or corporation holds elected office in that government entity.
• Bribery of private Colombian individuals and companies, employees of public entities or foreign public officials.
• Acceptance of bribes by private Colombian or foreign individuals and companies and employees of Colombian public entities.

Note that Law 1474:  (a) criminalizes bribing a foreign official, but not the foreign official's acceptance of the bribe, and (b) focuses on domestic public officials, but extends to private bodies and individuals that receive or offer any type of bribes.The penalties in Law 1474 potentially include prison sentences from four to 15 years and fines of up to US$300,000. Legal representatives may be personally liable for their companies' penalties.

The UK Bribery Act focuses On Foreign Public Officials 

Key elements of the Bribery Act include offences of:

• bribery of a foreign public official;
• offering and paying of bribes;
• requesting, agreeing to and receiving bribes; and
• failure by a commercial organization to prevent bribery
• failing to prevent bribery is a "strict liability" offence. In other words, it does not require intent to bribe or advance knowledge of the bribery, and the only defence is to establish that the organization had adequate preventative procedures in place
• these offences apply to any person, including a private person, who performs functions of a public nature, activities connected with a business, activities in the course of employment or is in certain positions of trust
• offences catch persons with a close connection to the UK, but cover conduct anywhere in the world.

Penalties in the Bribery Act range to 10 years of imprisonment and an unlimited fine. In some cases, a senior corporate officer may also be guilty and punished.

Prosecutors' discretion

Law 1474 and the Bribery Act are intended to provide prosecutors with the tools necessary to make significant progress toward the elimination of corruption. Both laws depart significantly from predecessor anti-corruption regimes and therefore organizations subject to these acts may need to make substantial changes in their existing internal policies and procedures.

UK corporations and organizations carrying on business in the UK, while also operating in Colombia, may be subject to both Law 1474 and the Bribery Act. Those organizations could potentially face criminal prosecutions in both countries for a single act of bribery in Colombia either of public or private officials.

A common trend in these two countries is to criminalize "kickbacks" and other payments to private company officials, and also to show less tolerance for facilitation or "grease" payments.  Overall, companies should expect stricter rules, more aggressive enforcement and oversight by various countries and their prosecutors.

Accordingly, this is a good time to ensure that your company's anti-corruption policies and internal processes are strengthened.

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