New guidance published by the Serious Fraud Office (SFO) this month confirms that companies will be prosecuted under the Bribery Act based solely on the law rather than on previous guidance issued after the new law was introduced in July 2011.
Although the SFO continues to reassure companies that “bona fide hospitality or promotional or other legitimate business expenditure is recognized as an established and important part of doing business,” under its tough new stance the SFO confirms that a company will face prosecution if there is “a realistic prospect of conviction” and “it is in the public interest to do so.”
Facilitation payments – small payments made to ensure public officials carry out their normal functions – are also on the SFO’s radar. Whilst acknowledging that such payments are “endemic” in some countries the SFO states that any such payment “is a type of bribe and should be seen as such.”
The SFO has also changed its approach to self-reporting. Whereas previously the SFO had indicated that self-reporting would result only in civil penalties, the new guidance is clear – if there is a realistic prospect of conviction, the SFO will prosecute if it is in the public interest. Each case will turn on its own facts.
One effect of the new guidance should be to shake any notion of complacency on the part of companies brought on by the lack of any corporate prosecutions so far under the Bribery Act. An Ernst & Young Global Fraud Survey earlier this year showed that only 26% of executives believed that the Serious Fraud Office (SFO) were willing to prosecute cases of bribery and corruption.
The only defence a company has to a charge of failing to prevent bribery under the Act is for it to prove that it had “adequate procedures” in place to prevent it, based on the following key principles:
- Risk assessment
- Top-level commitment
- Due diligence
- Clear, practical and accessible policies and procedures
- Effective implementation
- Monitoring and review
If you haven’t done so already you should therfore make sure you review your procedures to prevent your business being caught out. If you are in any doubt as to how the Bribery Act may affect your business, please do not hesitate to contact us – firstname.lastname@example.org.