Apr 20 2011: The Bribery Act 2010 - Are you ready?
The Government announced at the end of March that the Bribery Act will come into force on 1st July 2011, and also published its much anticipated Guidance on the legislation. The main Guidance produced should help commercial organisations adopt procedures (appropriate to their size and business environment) to prevent persons associated with them (eg. their agents at home or abroad) committing acts of bribery and thereby reduce their exposure to prosecution under the Act. There is also a useful Quick Start Guide, aimed specifically at SMEs. The main thrust of the Guidance, however, offers reassurance to businesses that "combating bribery is about common sense, not bureaucracy".
So, what does the Bribery Act mean for you?
In short, the Bribery Act will:
- Introduce a corporate offence of failure to prevent bribery by persons working on behalf of a business. A business can avoid conviction if it can show that it has adequate procedures in place to prevent bribery.
- Make it a criminal offence to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad. The measures cover bribery of a foreign public official.
- Increase the maximum penalty for bribery from seven to ten years imprisonment, with an unlimited fine.
The key points to note from the guidance are as follows:
Corporate Hospitality - The guidance makes clear that reasonable hospitality to meet, network and get to know your clients will not fall foul of the new legislation. #
‘Adequate Procedures’ Defence - The Act recognises a statutory defence of having ‘adequate procedures’ in place, in the event that an offence of ‘failure to prevent a bribe being paid’ is brought. The procedures that need to be put in place in order to rely on the statutory defence need only be proportionate to the size and nature of your business. So, whereas major multi-nationals must exercise greater due diligence and have more detailed compliance procedures in place, verbal communication may suffice for a small company. If there is very little risk of bribery being encountered by members of your company or on its behalf, no specific bribery prevention policies will be required to be put in place.
Associated Person - A company will only be held criminally liable for the acts of an "associated person" where that person actually represents or performs services for it and the bribery committed is intended to benefit that company. It is very unlikely therefore that a company will be liable for the actions of someone who simply provides services to it.
Facilitation Payments - Facilitation payments, which are payments made to induce officials to perform routine functions that they are obliged to perform in any event, remain illegal under the Act.
Prosecution - Cases may be brought only when either the Director of Public Prosecutions or the Director of the Serious Fraud Office is satisfied both that:
- a conviction is more likely than not; and
- prosecution is in the public interest.
An Action Plan - The Ministry of Justice has previously offered guidance to commercial organisations on the steps to take towards ensuring compliance with the legislation. They advise of the need for an action plan:
- Conduct a risk assessment within your own organisation
- Adopt a code of conduct which sets out how employees and other associated persons should behave from an anti-corruption point of view
- Appoint a compliance officer
- Conduct due diligence to ensure and review compliance with the code
Ironmonger Curtis is on hand to advise you on the implications of the Bribery Act 2010 for your particular organisation and to assist with the implementation of an ‘action plan’. Please telephone Jon Curtis on 0114 272 1903.
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