Sam Hannon reviews the likely impact of this latest piece of legislation
The long-awaited Guidelines for The Bribery Act 2010 have now been published. The Act will be in force from 1 July 2011, replacing the complicated, piecemeal offences at common law and Acts of Parliament dating back as far as 1889. The Bribery Act is intended to assist in combating bribery and corruption worldwide. Slee Blackwell Solicitors have undertaken a review of this controversial new law and its potentially serious and far-reaching implications.
The Act sets out four offences of bribery as follows:
1. Bribing – the active offence
2. Being bribed – the passive offence
3. Bribing a foreign official
Directly or indirectly, offering, promising, or giving an advantage to a foreign public official in an attempt to influence them in their role with the aim of obtaining or retaining business. The public official must be neither permitted nor required by applicable law to be influenced by the said bribe.
4. Corporate offence of failing to prevent bribery
This is a strict liability offence. A company will be guilty if it fails to prevent an “associated person” (e.g. an employee, worker, or consultant) bribing, or attempting to bribe someone with the intention of obtaining or retaining business, or an advantage in the conduct of the business for that company. There is no requirement for the company itself to be directly behind the bribery.
To whom does the Act apply?
The Bribery Act will have extensive implications for any business which is either registered or performs any part of its operation in the UK, and those persons associated with it. This includes bribery conducted abroad by, or on behalf of such a business, unless the custom or practice is permitted or required by the written law in the country or territory concerned. Similarly, prosecution for bribery offences also covers non-UK persons or companies involved in bribery within the UK.
What are the standards for determining bribery?
A key element of the offences under the Act is the intention of the ‘briber’ being to induce the ‘bribee’ to fail to perform their duties in line with relevant expectation. Otherwise known as The Expectation Test, it will be based on what a reasonable person in the UK would expect in relation to the performance of the activity. The exception to this is if the activity is permitted or required by the written law in the country or territory concerned.
In addition there is much concern surrounding how the Bribery Act will affect hospitality that in many businesses is so commonplace. The Guidelines published suggest that this will not amount to a bribe if it is genuinely reasonable and proportionate for legitimate commercial purposes, but the full extent of this is yet to be seen. Certainly, however, facilitation payments shall be considered as bribes under the Act.
What are the penalties?
If an individual is convicted of bribery, they may receive a prison sentence of up to ten years, a fine, or both. If a company or partnership is convicted, the company and/or its directors/partners could be subject to criminal sanctions. This may involve a fine of an unlimited amount to be paid from the business’ assets. In addition, public authorities may have discretion to exclude these organisations from public contract tenders.
What action can you take to protect your company and yourself?
Companies may be able to protect themselves from liability for bribery offences if they can prove “adequate procedures” are in place, designed to prevent anyone related to that business from committing bribery. Thus, the key question is what are adequate procedures?
The Ministry of Justice has published Guidelines on the suggested general good practices to adopt to ensure compliance. These are designed to be flexible and they do not impose any direct requirements on businesses. However, as a result, they fail to provide a clear and definitive checklist as to how far each business should go specifically to prepare for implementation of the Act.
Determining whether your anti-bribery and corruption procedures are adequate will therefore depend on the unique risks your organisation faces and will vary according to the nature, scale and complexity of your business activities.
If you are a person associated with a business in the UK or even one that has links to the UK, you would be wise to familiarise yourself with the anti-corruption policies and procedures of that business to ensure your own protection.
From an employer’s perspective, the Act will not change the disciplinary process that would need to be followed to investigate any alleged act of corruption, before a disciplinary sanction is imposed. Therefore, in respect of employees, a business should follow its own established, disciplinary and grievance procedure, or fall back on the ACAS Code of Conduct.
This is an evolving area of law and it is not currently clear how vigorously the Act will be enforced. It is therefore important that companies and individuals alike review their policies, procedures and contracts now in proportion to their own business risks, to ensure they are not caught out once 1 July 2011 arrives.
Slee Blackwell Solicitors are able to provide your business with the following support:
- Assist you in assessing the potential risks to your business
- Prepare and/or amend your companies written policies and procedures, tailored to your specific needs to ensure compliance with the Bribery Act
- Prepare and/or amend employment contracts and/or handbooks
- Prepare and/or negotiate contracts with third parties
- Assist with any employment and/or contractual disputes, whether you are a business or an individual associated with a business
- Provide further guidance on this legislation as it develops
Call Slee Blackwell Solicitors now on 0800 975 0902 for a free initial telephone consultation.