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Bribery Act - an overview

The Bribery Act 2010 is now in force. This article seeks to highlight the areas of risk for commercial organisations and suggests some compliance tips to help prevent breaching the Act.

Overview

The Act creates two general offences of:

1 giving, promising, or offering a bribe; and

2 requesting or receiving a bribe;

plus two more specific offences; of

3 bribing a public official; and

4 a corporate offence aimed at commercial bribery, which is failure of an organisation to prevent bribery ('the corporate offence').

If any of the offences (apart from the corporate offence) under the Act are committed with the 'consent or connivance' of a senior employee, that employee may be criminally liable, and may be imprisoned for a period of up to ten years.

Businesses should pay particular attention to the corporate offence. A business that fails to prevent bribery, which includes failing to prevent its employees or agents from engaging in bribery, can suffer an unlimited fine. The offence can be committed if a person associated with a business bribes another person with the intention of gaining a commercial advantage. The term 'associated person' is given a broad definition in the Act and includes agents, intermediaries, contractors and joint venture partners.

The offences are not limited to commercial bribery. The ‘Joint Prosecution Guidance of the Director of the Serious Fraud Office (SFO) and the Director of Public Prosecutions' states that there "may be many examples outside the commercial sphere where individuals attempt to influence the application of rules, regulations and normal procedures".

Employees

A commercial organisation may commit the corporate offence of bribery vicariously through the action or conduct of its employees. The main risks are deficiencies in employee knowledge, training or skills and a lack of clarity on polices governing gifts, entertaining and travel expenses. A commercial organisation may limit these risks and so have a defence to the corporate offence by carrying out the following:

implement a 'zero tolerance' bribery prevention policy which is communicated to staff on induction and regularly as part of training sessions;
provide training to staff on bribery and reporting procedures. Training should be continuous and regularly monitored and evaluated;
ensure that monitoring systems are in place at all levels, adopt a clear policy on gifts, expenses and corporate hospitality, keep records of gifts and centrally monitoring payments;
ensure that senior officers take responsibility for the bribery prevention programme;
develop and implement 'whistle-blowing' and reporting investigation procedures;
include express contractual obligations and penalties in relation to bribery in employment contracts and put in place appropriate disciplinary procedures.

Agents, Contractors, Intermediaries and Joint Venture Partners

Carry out sufficient due diligence on potential agents, contractors, intermediaries and joint venture partners;
Insert anti-bribery clauses into commercial contracts.

Non-specific compliance tips

Implement effective financial and auditing controls to pick up any irregularities;
Designate a responsible person to oversee bribery prevention matters;
Ensure that monitoring systems are in place at all levels.

Corporate Hospitality

With events like the London Olympics on the horizon, all businesses should know that corporate hospitality is generally permitted under the Act. As the Justice Secretary, Ken Clarke said, "no one is going to try to stop businesses getting to know their clients by taking them to events like Wimbledon, Twickenham or the Grand Prix." Only lavish hospitality is likely to be caught by the Act. Businesses can protect themselves by having a clear policy on corporate hospitality.

Summary

The SFO has made it be known that bribery in all sectors and at all levels will be prosecuted if there is sufficient evidence. To avoid the risk of prosecution it is important for commercial organisations to ensure that existing bribery policies and procedures comply with the Act.

For further details, please contact Tom Clark, a senior dispute resolution lawyer who has joined us recently.