On 1 July 2011 the Bribery Act 2010 (the Act) comes into force. The Act makes huge changes to the previous law in this area and creates four offences: bribing another person (section 1); being bribed (section 2); bribing a foreign public official (section 6); and, the focus of this E-bulletin, failure by a “commercial organisation” to prevent bribery (section 7).
A “commercial organisation” is defined in section 7 of the Act as any partnership or body incorporated in the UK carrying on a business in the UK or abroad, and any foreign partnership or incorporated body carrying on business in the UK. The section 7 offence is committed regardless of where in the world it takes place, and carries an unlimited fine.
Helpfully, section 7 also sets out a defence for commercial organisations who are able to prove that they had adequate procedures in place to prevent bribery occurring, even if they have failed to prevent the bribery itself. The Secretary of State has recently issued guidance for businesses, in accordance with section 9 of the Act, on what may be considered to be adequate procedures.
The guidance intends to assist commercial organisations and is formulated around the following six principles:
- proportionate procedures;
- top level commitment;
- risk assessment;
- due diligence;
- communication; and
- monitoring and review.
Each principle is set out in great detail in the guidance document, together with suggested procedures, and some useful case studies. It is made clear that small or medium sized businesses are not expected to adopt the same procedures as large multinational organisations but should comply with the principles in a proportionate way.
It is also acknowledged that the guidance is not prescriptive and an organisation which hasn’t implemented the suggested procedures may still be able to show that they had adequate procedures in place to prevent bribery occurring, and that the courts will take into account the facts and circumstances of each case.
It should be noted that there has been some criticism of the guidance from those who believe it goes too far in trying to water down the Act, and that the wording may allow companies to evade prosecution on technical arguments. However, it should be remembered that the Courts will enforce the Act, not the guidance, and so organisations will want to ensure that their anti-corruption polices are considered “adequate” in light of the guidance, in addition to being fully compliant with the Act.
The full guidance can be found Lisa Marie Roca on Tel: 020 7551 7608
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The above article was kindly provided by BWB who will provide up to 20 minutes free telephone advice to TAF members and will give 10% discount on any further work undertaken