The Bribery Act 2010 ("the Act”) came into force on 1 July 2011. It is of relevance to all UK businesses of all sizes in both the public and private sectors.
The Act creates four new offences as follows:
- paying bribes;
- receiving bribes;
- bribing a foreign public official, and
- failing to prevent bribery.
The fourth of these offences, that of "failing to prevent bribery” is especially important for companies. A company can be guilty of an offence if a rogue employee or associate (such as an agent acting on its behalf) commits an offence even if the company was unaware of the unlawful behaviour. All companies should therefore assess the risks in their business of bribery occurring and take adequate steps to prevent this.
The Act provides a defence if a company can show that it had adequate procedures in place to prevent bribery. It is therefore crucially important to obtain the appropriate guidance to make sure that the issues have been properly addressed and that your company has created an adequate process to prevent bribery occurring.
What about corporate hospitality?
Genuine hospitality, or similar business expenditure that is both reasonable and proportionate, will not be caught by the Act.
By way of illustration, to invite existing and potential customers to a company golf day or to a dinner or sporting event is very unlikely to engage the Act, whereas less proportionate expenditure which is in reality a cover for bribing someone to act in a particular way is much more likely to come under scrutiny.
"Facilitation payments” to induce any official to perform routine functions they are otherwise obligated to perform (e.g. in selecting a supplier in a tender process) will always be covered by the Act.
What action should you take?
The Government has published detailed guidance regarding the Act. The guidance points to six principles that companies should bear in mind as follows:
- proportionate procedures;
- top level commitment;
- risk assessment;
- due diligence;
- communication, and
- monitoring and review.
The guidance aims to give all commercial organisations a starting point for planning, implementing, monitoring and reviewing their bribery-free business regime. The guidance is not prescriptive and the amount of work which is required will clearly vary significantly from organisation to organisation. The onus is, however, now on each organisation to review its business, to carry out the relevant risk assessments and to determine whether its procedures are adequate to prevent bribery. Where they are not, the organisation should seek to implement anti-bribery procedures without delay.
The guidance aims to give all commercial organisations a starting point for planning, implementing, monitoring and reviewing their bribery-free business regime. The guidance is not prescriptive and the amount of work which is required will clearly vary significantly from organisation to organisation. The onus is, however, now on each organisation to review its business, to carry out the relevant risk assessments and to determine whether its procedures are adequate to prevent bribery. Where they are not, the organisation should seek to implement anti-bribery procedures without delay.
Armitage Sykes are able to provide assistance in designing and implementing risk assessments, drafting appropriate policy documents and drafting internal communications. Additionally we can advise as to the applicability of the Act to specific circumstances. For further information regarding any aspect of the Bribery Act 2010 contact Robert Turner or Rob Kelly in the Firm's Company Commercial Department.
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