The Bribery Act 2010 (the “Act”) will come into force on 1 July 2011. The Act had been due to come into force in April of this year, but implementation was delayed whilst the government took into account fears expressed by the business community that, amongst other things, the Act would render the UK an uncompetitive market to transact business.
The Act creates a new corporate offence, under section 7; this has the effect of rendering commercial organisations guilty under the Act if they fail to prevent bribery and do not have adequate procedures in place designed to prevent acts of bribery. A commercial organisation convicted of failing to prevent acts of bribery (either in the UK or anywhere in the world) could receive an unlimited fine.
The government has officially published guidance on 30 March 2011 on what procedures commercial organisations can put in place to prevent bribery from occurring within their organisations (“Adequate Procedures Guidance”). It will be a defence, under section 9 of the Act, to the strict liability offence created by the Act if the commercial organisation can show that it had adequate procedures in place to prevent the act of the bribery. The three month period between the publication of the Adequate Procedures Guidance and the implementation of the Act is to give commercial organisations the opportunity to carry out risk assessments of their business and put into place adequate procedures.
The Government considers that the adequate procedures should be informed by SIX PRINCIPLES:
- PROPORTIONATE PROCEDURES – A commercial organisation’s procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the commercial organisation’s activities.
- TOP-LEVEL COMMITMENT – The top-level management of a commercial organisation (be it a board of directors, the owners or any other equivalent body or person) are committed to preventing bribery by persons associated with it. They should foster a culture within the organisation in which bribery is never acceptable.
- RISK ASSESSMENT – The commercial organisation assesses the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment is periodic, informed and documented.
- DUE DILIGENCE – The commercial organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation in order to mitigate identified bribery risks.
- COMMUNICATION (INCLUDING TRAINING) – The commercial organisation seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces.
- MONITORING AND REVIEW – The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.
The Adequate Procedures Guidance also contains eleven case studies for commercial organisations to understand how the SIX PRINCIPLES might be put into practice.
The Lord Chancellor and Secretary of State for Justice, Kenneth Clarke QC MP, says in the foreword to the Adequate Procedures Guidance that “combating the risks of bribery is largely about common sense, not burdensome procedures…no one wants to stop firms getting to know their clients by taking them to events like Wimbledon…Addressing bribery is good for business because it creates the conditions for free markets to flourish”.