The Bribery Act
The Bribery Act 2010 came into force on 1st July 2011. It has potentially serious implications for any commercial organisation conducting business in the UK.
It introduces four principal offences:
1. To give, promise or offer a bribe (i.e. financial or other advantage) with the intention to:
- obtain or retain business or an advantage in the conduct of business; and
- Induce or reward improper conduct (such as breach of an expectation that the recipient will act in good faith or impartially).
2. To request, agree to receive or accept a bribe.
These basic offences apply to both the public and private sectors.
3. Bribery of a foreign public official – is a separate offence distinguished from the basic offence by whether or not the law of the relevant jurisdiction permitted the foreign public official to be influenced by the financial or other advantage.
4. A corporate offence – being the failure of a 'relevant commercial organisation' to prevent bribery by the persons working on its behalf, including employees, agents and subsidiaries - whether domestic or foreign.
The corporate offence is one of strict liability. Fault need not be shown. However, it is a defence under the Act if the commercial organisation can demonstrate that it had 'adequate procedures' in place to prevent bribery.
The Ministry of Justice has published guidance about procedures which organisations can put in place to prevent persons associated with them from engaging in bribery.
Penalties for committing the new offences include both fines and imprisonment - but as well as criminal penalties under the Act, companies convicted could find themselves permanently disbarred from tendering for public sector contracts under the Public Contracts Regulations 2006. An organisation could also be fined by sector regulators such as the FSA.
So, what can be done now to ensure that your organisation has 'adequate procedures' in place?
It is important that an organisation's anti-bribery culture is led from the top – encouraging a culture in which bribery is not acceptable. Directors and senior managers need to understand that they could be personally liable for offences committed by the organisation if they have 'consented to' or 'connived in' offences under the Act.
It is important to carry out a risk assessment of the business. In what sectors and territories does your company operate? Some present greater risks than others.
In what type of transactions is your company engaged? Some transactions carry intrinsically higher risks, such as procurement and supply chain management, regulatory relationships involving licences, permits and other approvals and even charitable contributions.
Review how your company or those who represent it entertain potential customers – especially from government agencies or state-owned enterprises, particularly overseas and consider taking local legal advice.
Involvement in joint ventures and with agents and intermediaries can carry additional risks.
Having conducted a risk assessment, you would be well advised to establish or review policies and procedures to prevent bribery. Communicate them to your staff and set down the procedure they should follow if offered or asked to make a bribe.
If you have identified higher risk activities or territories, consider training for staff.
Consider whether accounting systems are adequate to detect a 'pay-out.'
Look at your 'whistle-blowing' policies and consider how your organisation will respond to allegations of bribery – including in the media.
KBL Solicitors will be pleased to advise on what steps you can take in order to demonstrate that you have established appropriate measures to assess risk and have in place 'adequate procedures' capable of affording you the benefit of the statutory defence to an allegation of corruption.
To discuss in more detail please contact Jonathan Shorrock on 01204 558295 or email jshorrock@kbl.co.uk
