The Bribe You Didn’t See Coming and the Clause That Could’ve Saved You

Even the best-run companies can be blindsided by bribery they neither authorised nor detected. Vietnam prosecutes individuals, not entities; the UK and US pursue companies extraterritorially. The result is a structural mismatch: a Vietnamese counterparty may face no corporate charge locally, yet its foreign partner remains exposed abroad. The contractual safeguard is the anti-bribery and corruption (ABC) clause. This article sets out how to use the ABC clause as a risk-allocation tool in Vietnam-facing deals.

When legal borders misalign

Under Vietnam’s Criminal Code, bribery offences are prosecuted against individuals. Corporate criminal liability exists for certain enumerated crimes, but not for giving or receiving bribes; the natural person is prosecuted, while the legal entity faces administrative or civil exposure. Vietnam recognises no facilitation-payment exception; both material and non-material advantages can constitute a bribe, with monetary thresholds affecting charging bands, not permissibility.

Foreign regimes, especially the US and UK, typically cast a wider net, with an extraterritorial extent. UK or US companies transacting in Vietnam may face liability at home even if the misconduct occurs abroad and without their instruction. Under the UK Bribery Act (UKBA), bribes paid by “associated persons”, including local counterparties, can trigger corporate liability unless the UK company can show adequate procedures. That defence fails where senior management consented, turned a blind eye, or connived. Individual liability is not abstract; it arises where misconduct is tolerated. The US Foreign Corrupt Practices Act (FCPA) similarly captures indirect payments via intermediaries, including where there is wilful blindness. Listed entities also face stand-alone obligations on books, records, and controls; breach alone can attract liability, even absent corrupt intent.

Where it is an enforcement reality, the divergence is anything but academic. On 29 September 2023, US authorities resolved parallel actions with Albemarle over intermediary bribery that included Vietnam tenders; the combined Securities and Exchange Commission/Department of Justice outcome exceeded USD 218 million, secured entirely in the United States and not contingent on a local prosecution, with the Vietnam conduct the largest slice.

In a Vietnam-facing cross-border deal, a Vietnamese party may face no entity-level bribery charge locally, yet the foreign contracting company remains exposed at home, even without instruction or control. That asymmetry is precisely where the ABC clause earns its keep.

Structure and substance of the ABC Clause

The ABC clause is not a treatise; it is there to create process and proof. In practice, the clause sets a clear conduct baseline and a short, disciplined pause–review–exit route with access to the right records. That is what tends to read well to regulators and boards when questions arise.

Set the prohibition

Adopt a single, workable prohibition: no offering, promising, giving, requesting or accepting any advantage, whether direct or indirect, and include so-called facilitation payments in that prohibition. Public materials indicate the US “facilitating payment” concept is narrow and recording-sensitive, while the UK and Vietnam do not recognise such an exception. A flat prohibition usually avoids cross-border friction. State that authorisation, consent or connivance by managers is a breach.

Extend the obligation

Exposure of corruption commonly arises through intermediaries. It is therefore usual to flow down the ABC obligations to anyone performing services for or on behalf of either party, such as agents, introducers, subcontractors, customs brokers, distributors acting as service channels, joint ventures, and controlled affiliates, and to make the contracting counterparty responsible for its chain. This is where the UKBA’s “associated person” and the FCPA’s third-party exposure may be viewed in practice.

Define the trigger, pause, and review

Define credible concern of breach of the ABC clause as a specific, objectively reasonable basis to suspect an ABC breach in connection with the contract (not rumour). Examples include a regulator or law-enforcement notice, a named whistleblower with particulars, reliable media or NGO material, internal-audit anomalies tied to the mandate, or a third-party admission. On a credible concern, issue a standstill notice and pause new purchase orders, shipments, customs clearances, and discretionary payments (with safety/perishables carved out). Preserve evidence and run a time-boxed review where the counterparty provides a core packet, including proof of payments, agent/vendor master data, approvals, gifts and hospitality logs, and government-touchpoint files (licensing, inspections, customs). Allow ABC clause-scoped access and targeted interviews of relevant decision-makers under confidentiality and privilege protections. Complete the review within a defined period, extendable once for good reason, then either lift the standstill or move to the exit or remediation mechanics set out below.

Built in the exit

Allow termination for cause on credible evidence resulting from a breach of the ABC clause. For example, a charge or summons; a regulator or court documentary finding; or documentary proof of an improper transfer/advantage tied to the contract. If continuity is essential, stipulate a time-boxed remediation path, such as remove implicated personnel/agents, impose pre-approval for government-touching spend, and commission an independent controls review with written certification by a fixed date.

From paper to table: workable concessions

On paper, the structure above is the US/UK side’s ideal, practical points likely to be pressed across the table by Vietnam counterparty: knowledge of historic conduct, retroactive effect, audit scope, facilitation payments, and data protection. The aim is to preserve the control architecture while removing obstacles to signature.

Keep the ban on bribery clear and without exception, including any facilitation payments. Soften only the past-fact representations: allow disclosure warranties to be given to the best of the supplier’s knowledge after reasonable enquiries, while the ABC prohibition applies prospectively from signing. Address legacy exposure with a one-off, targeted disclosure of any known ABC issues tied to the work. Keep audit rights fact-triggered and proportionate. On a credible concern, require a defined core packet, permit targeted interviews under confidentiality and privilege, and complete the review within a short, stated period. Decline facilitation carve-outs, but allow a narrow duress valve for true coercion with immediate reporting and accurate recording.

Finally, given Vietnam’s tighter personal-data rules, add a privacy overlay so the review remains lawful: confirm a lawful basis or obtain consent where required, notify affected staff, minimise the data collected, complete any cross-border transfer steps before data export, apply appropriate security and redaction, and delete review data within a defined period.

Why do both sides need the clause?

For a US/UK-connected side, the clause belongs in the defence file in case of regulators asking questions, it sets a recognisable standard, informed by UKBA/FCPA official guidance or equivalent and recent cases, and shows a working pause–review–exit with access to records.

For the Vietnam party, it delivers predictability; concerns are channelled through agreed steps, so operational grit does not become a reputational or contractual dispute. In practice, ABC clauses have become standard contractual terms from US/UK parties, where a counterparty will not accept those basics, it may be treated as red flag, specifically, FCPA guidance treats that as an unresolved red flag; the prudent control is not to contract, or, if the point emerges later, to terminate.

Authors:
Chan Hong, Speacial Cousel, Dentons LuatViet
Nguyen Thi Cam Tien, Associate, Dentons LuatViet