Business owners should prepare now for the Bribery Act.
The Bribery Act 2010 was passed in April 2010 and will come into force in April 2011. It introduces far-reaching changes to UK anti-corruption laws that will affect all businesses.
- It extends the crime of bribery to cover all private sector transactions.
- It creates a new strict liability offence of failing to prevent bribery.
- The offences are very broadly defined and it has significant extra-territorial reach.
- The offences carry criminal penalties for individuals and organisations.
The Serious Fraud Office describes the new regime as “the toughest bribery legislation in the world” and has announced its intention to vigorously enforce it.
The Act creates four offences:
- Offering, promising or giving a bribe.
- Requesting, agreeing to receive or accepting a bribe.
- Bribing a foreign public official to obtain or retain business.
- A new strict liability offence for commercial organisations where they fail to prevent bribery by those acting on their behalf.
A commercial organisation commits the new offence if a person associated with it bribes another person for that organisation’s benefit. This means that your agents, employees, subsidiaries, intermediaries, joint venture partners and suppliers could all render your business guilty of this offence.
Liability is strict: there is no need to prove negligence or the involvement and guilt of the ‘directing mind and will’ of the organisation. This makes the offence easier to prove and will probably lead to more prosecutions and convictions.
Criminal penalties are available:
- Individuals can be jailed for up to ten years and/or receive an unlimited fine.
- Companies can receive unlimited fines.
- Directors are likely to be disqualified for up to 15 years.
The only defence is to prove you had “adequate procedures” in place to prevent bribery. These are not defined in the Bribery Act but the Ministry of Justice has published draft guidance which sets out the following key principles:
- Risk assessment.
- Top-level commitment.
- Due diligence.
- Clear, practical and accessible policies and procedures.
- Effective implementation.
- Monitoring and review.
We strongly recommend that you review your procedures now to prevent your business being caught unawares by the new regime in April 2011.
If you are in any doubt as to how the Bribery Act will affect your business, please do not hesitate to contact the experts in our commercial department – firstname.lastname@example.org .