As part of a new anti-corruption package announced on 3 May 2023, the European Commission has proposed a new directive (Directive) which, if implemented, would require EU member states (Member States) to meet common standards in their anti-corruption legislation.
More detail on the EU’s anti-corruption package, including the proposed new rules, an overview of the EU anti-corruption framework and expected next steps is set out here. The average timeline for a directive to become EU Law from Commission proposal stage (if adopted) is eighteen months. If the proposal is adopted, Member States would then have a further eighteen months to transpose the Directive into national law (i.e. until roughly 2026). The proposed Directive could significantly increase the risk for many companies of prosecution for anti-bribery and corruption (ABC) offences, and further increase scrutiny of ABC compliance programmes.
The Directive will require companies with operations in / a nexus to Member States to ensure their ABC compliance programmes meet the new standards (the implementation of which may vary between different jurisdictions). Given the practical challenges of identifying which legislation may apply, particularly for multi-national companies, it is likely that companies may need to adopt the ‘high-water mark’ approach. In practice, this may mean ensuring compliance with the most stringent aspects not only of laws implementing the new Directive, but also other applicable laws and associated guidance, for example the US Foreign Corrupt Practices Act 1977 (FCPA), UK Bribery Act 2010 (UKBA) and the French Criminal Code as well as the law n°2016-1691 (the Sapin II law). For example, companies with multi-national operations may need to consider guidance issued by UK and US authorities in relation to compliance programmes, and may need to consider putting in place policies and procedures to protect against improper payments made by ‘associated persons’ (for example, agents, service providers or intermediaries) as whilst these might not be caught by the Directive, they may be considered an offence under other applicable laws. Comparisons between the Directive and these legislative frameworks are set out below.
Aside from keeping a watching brief, companies should consider their EU operations (and any other operations likely to be subject to the Directive) and consider the strength of their ABC compliance programme in those jurisdictions (and whether any enhancements are likely to be required, including training of senior managers who may trigger liability under the Directive).
Key elements of the Proposed Directive: how does this compare with the UKBA, FCPA and the Sapin II law?
The Directive aims to introduce a number of measures across Member States, including a number of new offences[1] and minimum penalties. We have summarised below a comparison of the Directive with the UKBA, FCPA and the French Criminal Code and Sapin II law.
| Proposed Directive | UK | US | France | |
| Active vs. passive bribery | The Directive criminalises both ‘passive’ and ‘active’ bribery (i.e. both the promising, offering and giving of a bribe – active bribery – and the request or receipt of a bribe – passive bribery). | This is aligned with the UKBA, in which both active and passive bribery are offences. | This goes further than the FCPA, which only prohibits offers, promises, authorisations of, or the payment of a bribe (active bribery). | This is aligned with the French Criminal Code, in which both active and passive bribery are offences. |
| Private vs. public sector bribery | Both public and private bribery are proposed offences under the Directive. Public officials are defined broadly, to include not only EU officials, but also those working in international organisations (including the institutions of the European Union), and national and international courts. | This is aligned with the UKBA, in which public and private bribery are both offences. Foreign public officials are even more widely defined than in the Directive and include individuals who (i) hold any legislative, administrative or judicial position of any kind in any country; (ii) exercise a public function for a foreign country or for the country’s public agencies / enterprises; or (iii) are officials or agents of public international organisations. | The FCPA only prohibits bribery of government officials / public bribery, although there are other federal and state laws that prohibit commercial / private bribery. Foreign Official is broadly defined in the FCPA and includes officers or employees of: (i) any non-US government, whether national, state, provincial, or local; (ii) any department, instrumentality, or agency of a non-US government; (iii) any state-owned or controlled company; (iv) any non-US political party; and (v) any public international organisation (e.g., the World Bank), as well as any candidate for non-US political office. The FCPA would apply to these individuals regardless of rank or title. | This is aligned with the French Criminal Code, in which public and private bribery are both offences. |
[1] The Directive also introduces further offences, including misappropriation (article 9), trading in influence (article 10), abuse of function (article 11), obstruction of justice (article 12) and enrichment from corruption offences (article 13).