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ACCA Applied Skills · Corporate and Business Law (Global) · Fraudulent and criminal behaviour

Marlow plc is a company that has adequate procedures in place to prevent bribery. An agent engaged by Marlow, acting without the knowledge of any director, bribes a foreign official to obtain business for Marlow. Under the corporate offence of failing to prevent bribery found in many jurisdictions (for example the UK Bribery Act 2010 model), what is the likely position of Marlow?

Marlow may escape liability by proving it had adequate procedures to prevent bribery. Under the failure-to-prevent offence, a company is exposed when an associated person such as an agent bribes to obtain business for it, but adequate procedures provide a complete defence.

  1. AMarlow is automatically guilty because the agent acted on its behalf and obtained business for it
  2. BMarlow is not guilty, because a company can never be liable for the acts of an agent
  3. CMarlow may defend itself by proving it had adequate procedures designed to prevent briberyCorrect
  4. DMarlow is liable only if a director is also convicted of bribery

Explanation

Under the failure-to-prevent model, a commercial organisation is liable where a person associated with it bribes to obtain business for it, but has a defence if it proves it had adequate procedures in place. Automatic liability is wrong because the defence exists. Liability does not depend on a director's conviction, and companies can be liable for associated persons such as agents.

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