Takeaways for Companies doing business in Nigeria
For investors looking to do business and companies doing business in Nigeria, there are myriad considerations. Navigating the business landscape without falling foul of the provisions of the UK Bribery Act 2010 (UKBA) and the US Foreign Corrupt Practices Act 1977 (FCPA) should be a key consideration. These legislations have extra territorial application.
The present leadership got elected on the promise of rooting out corruption and has pursued its anti-corruption stance with vigour. These laws did not come into force recently, but their application to Nigeria has never been more relevant than now. Consequently, the leadership, in a bid to attract increased foreign investment has taken measures to encourage ease of doing business in the country.
This article seeks to highlight the offences under the laws and how they can be avoided.]
Scope of the Laws
The UK Bribery Act 2010
The Bribery Act was enacted on 8th April 2010 but came into force on 1st June 2011. Its provisions are on offences relating to bribery and for connected purposes.
• The Scope of the Bribery Act
The Bribery Act creates 3 offences:
o any activity performed by or on behalf of a body of persons (whether corporate or unincorporated).
Furthermore, there must be an expectation of good faith and impartiality in the performance of the activity. Also, performance of the activity must put the performer in a position of trust. Any activity that falls into the categories stated above and meets one of the fiduciary conditions in the second test, is a relevant activity under the Act.
To the extent that this offence does not require proof of intention by the commercial organisation, this is an absolute liability offence. The only defence under the Act is when a commercial organisation proves that it had in place adequate procedures to prevent associated persons from undertaking the relevant corrupt acts.
The Bribery Act applies to:
The Foreign Corrupt Practices Act 1977
The FCPA was enacted to check the prevalent practice of making illegal payments and bribing foreign public officials by American companies in the seventies. Since then, numerous convictions have been obtained under the Act.
Scope of the FCPA
Basically, the FCPA makes it unlawful for persons to make payments or offer gifts or carry out any act in furtherance of such payments/gifts, directly or indirectly to a foreign official for the purpose of influencing the decision of such official.
The FCPA applies to:
Defences under the FCPA
These persons as stated above are
Note that while the UKBA prohibits bribes to foreign officials just like the FCPA it goes further by extending same to bribe perpetrated in a private commercial setting.
What Companies in Nigeria need to Know !
In view of the above, foreign companies and investors looking to do business or carrying out projects in Nigeria either directly or through subsidiaries must balance their operations in compliance with these laws. An issue which may arise is the status of facilitation payments in Nigeria. Clearly, the definition of facilitation payments under the FCPA covers a common practice in Nigeria. Nonetheless, the line between an intended facilitation payment and a bribe can be thinner than a strand of thread.
For instance, the Code of Conduct for Public Officers provides that a public officer shall not put himself in a position where his personal interest conflicts with his duties and responsibilities. Public officers are also prohibited from asking for or accepting property or benefits of any kind on account of anything done in discharge of duties.
Avoiding this pitfall (and others) arising from these laws requires Companies and investors to be proactive in their business operations. Thus, the following action points should be considered or implemented for such investors/Companies operating in the Nigerian environment.
Action Points for Companies
Corruption remains a scourge globally. The two laws are part of the international effort at combating the menace. The Nigerian government needs to push more laws, strengthen existing ones and institutions and back policies with the political will to fight the plague. A genuine drive would improve the country’s ranking on corruption perception index and boost investors’ confidence.
Dayo Adu – email@example.com