The Bribery Act 2010 (the “Act”) was one of the final acts of the last government, pushed through during the ‘wash up’ period after the general election was called.
A number of factors were responsible for the Act coming into being, not least the realisation that the UK’s anti-corruption laws (which date back to the various Prevention of Corruption Acts 1889 - 1916) were no longer adequate for modern corporate life. In addition, the government was coming under increased pressure from the US for UK anti-corruption policies to fall more into line with their FCPA (Foreign Corrupt Practices Act) and a report by the Organisation for Economic Co-operation and Development (OECD) had criticised the UK approach to corruption (particularly following the discontinuance of the case against BAE Systems).
The Act, which comes into force in October 2010, seems to have crept somewhat under the radar of the media and the vast majority of businesses, partly because there was general parliamentary consensus that the existing anti-bribery legislation was totally inadequate. This has meant that the provisions of the Act have not been subjected to the usual scrutiny of the fourth estate and several of them may come as a surprise to many companies, in particular those which have extensive overseas operations.
The main provisions are:
- It is an offence to offer, promise or give a bribe
- It is an offence to request, agree to receive or accept a bribe from another person
- It is an offence to bribe a foreign public official
- Any commercial organisation failing to prevent bribery being committed in connection with its business is guilty of a corporate offence, punishable by an unlimited fine.
The last point, arguably introduces the most contentious part of the proposed legislation. The failure to prevent bribery extends to individuals acting on behalf of an organisation. This can mean not only employees but also the staff of foreign partners and ‘associated’ persons – a term which is loosely defined. Therefore, an organisation that does not have clear policies and procedures to prevent bribery may suddenly find itself facing a corporate prosecution in the UK courts.
If you are likely to be affected, what should you do?
The Secretary of State for Justice is due to publish official guidance, before the Act comes into force, which will outline procedures to help commercial organisations to prevent bribery either directly or on their behalf. We will be reporting on this as soon as it comes out. However, in summary, the key objective of the Act is to ensure that anti-corruption and bribery policies are dealt with at board level within corporate entities, with a nominated individual to take responsibility for any oversights. In short, businesses must:
- Demonstrate that they have assessed and understood the risks to their business given the location and nature of their activities
- Put in place, and monitor, clear anti-bribery policies and procedures for staff and associated persons to follow
- Put in place stringent financial controls and record keeping to minimise the risk of bribery
- Put in place whistle blowing procedures so that staff can report bribery and corruption confidentially and without prejudice.
In theory, all companies are affected by this legislation but some more than others - for instance those with extensive overseas operations, including subsidiaries, partnerships and other similar arrangements, and those with significant export and import operations. However, as a general point of principle, it is advisable for all commercial entities to review their operations and associated risk factors and put in place appropriate compliance procedures, using the above guidance as a template.
For more details of the Act visit the government website at
www.justice.gov.uk/publications/bribery-bill.htm or for a no-obligation chat about the implications the Bribery Act may have on your business, please contact
Mark Lewis on 01926 880700.
