12/05/2011

The Bribery Act 2010: What’s in it for me?

The long awaited Bribery Act 2010 will come into force on 1st July 2011. Businesses are best advised to familiarise themselves with the new Act and prepare their organisations for its effect.

The Act largely consolidates old law, by reiterating the general offences of offering, promising or giving a bribe to another person and also of agreeing to receive or accepting a bribe from another person. It also introduces a new offence to bribe a foreign official to obtain or retain business.

The main change and, of most interest and concern to businesses is that a new corporate offence has been introduced whereby an organisation will be criminally liable for failure to prevent bribery by associated persons.

This new offence provides that if an associated person commits any act of bribery for the benefit of the business, then that business will have committed an offence. The definition of associated person catches a wide range of individuals, who could be business employees or agents, sub-contractors and external third parties who perform services for and on behalf of the organisation. The business could be held liable for failing to prevent the associated person’s bribery, even when this is conducted without the knowledge or consent of that business

If a business is prosecuted under the Act they could face an unlimited fine, and resulting negative publicity. Public authorities will also have discretion to exclude such organisations from any future tenders.

The new Act stresses the importance for every business to have corporate governance mechanisms in place to prevent bribery within its own organisation and also to prevent associated persons acting in this manner. Significantly the Act provides a defence to prosecution if the business can prove that it had adequate procedures in place intending to prevent bribery from being committed on its behalf.

The Government has published General Guidance and a Quick Start Guidance on what practical measures businesses can take to implement these adequate procedures. In summary some of the things that businesses could do include:

  • Using procurement and contract management procedures to minimise the opportunity for corruption by sub-contractors and suppliers.
  • Taking responsibility at board level for the organisation’s anti-corruption programme
  • Training on a regular basis to all relevant employees
  • Appointing an anti-bribery compliance officer, who has the authority to monitor and implement anti-bribery practices.