Published: Suffolk Business and East Anglian Daily Times

Date: November 2010

Author: Kate Dodsworth

The Bribery Act 2010 (“the Act”) comes into force in April 2011 and will replace current anti-bribery legislation, which is often criticised as out of date and difficult to enforce.

The Act creates four new criminal offences. The first two are straightforward and relate to giving and receiving bribes. The third offence relates specifically to bribery of foreign public officials. The maximum penalty for individuals committing these offences will be 10 years in prison.

The fourth offence is the failure of commercial organisations to prevent bribery. A relevant commercial organisation (e.g. a limited company or a partnership) will commit a criminal offence if a person associated with that organisation receives a bribe, bribes or attempts to bribe another person.

Penalties for the corporate offence include unlimited fines, confiscation of any benefit accruing from the bribe and a ban on the organisation engaging in public sector contracts for up to 5 years.

The scope of the Act is far-reaching. The new corporate offence can be committed by an organisation with any type of presence in the UK, not just by UK companies. It also extends to bribes given or received outside the UK. For example, if a US company with a UK subsidiary takes part in bribery in Africa, the US company may be prosecuted under the Act, even though the offence had nothing to do with its UK subsidiary.

The definition of “person associated” with the organisation is also wide. The Act covers employees, sub contractors, agents and intermediaries and even third party business partners in a joint venture.

The only defence is for the organisation to show it had “adequate procedures” in place to prevent bribery. Although the government will publish guidance on such procedures in early 2011, ultimately it will be for each organisation to prove the adequacy of their own procedures on an individual basis.

This is a ‘strict liability’ offence, meaning that there’s no need to prove any intention to bribe or accept a bribe. If the defence is not made out then the organisation will be found guilty – it’s as simple as that.

It is imperative, therefore, that businesses have anti-bribery procedures in place and also that all members of staff are fully trained and aware of the risks. The draft guidance makes it clear that the defence will only be made out if steps are taken to ensure that procedures are implemented and understood, not just left to sit on a shelf and collect dust.

In addition to creating or updating a specific anti-bribery policy, you should look closely at your corporate hospitality policy. Whilst tickets to sporting events or regular business lunches may be above suspicion, paying for a target client’s five star holiday is more likely to be seen as a bribe! You should also review your public interest disclosure or ‘whistleblowing’ policy to ensure that adequate protection is given to individuals who report suspicions of bribery.

Another option to consider is whether to update your contracts of employment (even if it’s just for new starters) to include a positive obligation to report suspected bribery, making it clear that failure to do so will result in disciplinary action.

Finally, you should look at updating the disciplinary policy itself, citing bribery as an example of gross misconduct in your staff handbook.

There is, therefore, much to be done as April 2011 looms.

For further information contact Kate Dodsworth