Bribery Act: Delay In Implementation

February 21, 2011

The implementation of the Bribery Act 2010, which was due to come into force in April 2011, has been delayed. No revised date for implementation has been given by the government.

The delay in implementation has come about due to British business leaders, most notably the Confederation of British Industry, having expressed serious concerns that the Bribery Act 2010 will render the UK anti-competitive in straitened economic times. By way of example, the CBI has highlighted that the Bribery Act 2010, as presently drafted, would leave UK companies potentially barred from entering into EU public contracts.

Many commentators have also noted that the Bribery Act is far more stringent than the US Foreign and Corrupt Practices Act. For instance, no exception is made for 'facilitation payments' and a person could be liable under the Bribery Act 2010 for acts committed of which he does not have explicit knowledge.

In the UK, the current law on bribery is a mixture of the common law (law made by Judges through Court decisions) and the Prevention of Corruption Acts 1889 to 1916. The Bribery Act 2010 was enacted in order to clarify and codify the current law, which was found by the Law Commission to be "uncertain and inconsistent".

Of particular concern to British businesses is the new corporate offence, under section 7 of the Bribery Act 2010. Section 7 creates a new offence with the effect that commercial organisations will be guilty under the Bribery Act 2010 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.

It will be a defence for a commercial organisation to show that it had adequate procedures in place to prevent the act of bribery. According to section 9 of the Bribery Act 2010, the government must produce guidance on what constitutes adequate procedures. This guidance was originally due out in January of this year, but has been delayed. The Bribery Act 2010 cannot come into force until at least three months have passed from the date of publication of the guidance on adequate procedures. This is to give commercial organisations a sufficient period of time in order to put into place the requisite policies and procedures. The draft guidance published by the Ministry of Justice in the Autumn of 2010 sets out 6 key principles: (1) risk assessment; (2) top-level commitment; (3) due diligence; (4) clear, practical and accessible policies and procedures; (5) effective implementation; and (6) monitoring and review.

As matters currently stand, directors and other stakeholders in commercial organisations should be aware that bribery is and always has been illegal in the UK. However, the Bribery Act 2010 will, when it eventually comes into force, clarify (and be likely to expand) what constitutes an illegal act, but also set out guidance which if followed will provide a defence. When that will be is anyone’s guess at the moment, so watch this space.


Related pages:

Bribery and Corruption more

Corporate more

Litigation, Arbitration and Alternative Dispute Resolution more

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