The Ministry of Justice announced on 20 July 2010 that the Bribery Act will come into force in April 2011.
Bribery in sport continues to hit the headlines. FIFA's ethics committee recently investigated the comments of the former English Football Association Chairman, David Triesman, concerning the bidding process for the 2018 and 2022 football World Cups before taking no action. John Higgins is to appear before a tribunal to give evidence in relation to allegations around alleged payments for affecting the outcome of frames. Meanwhile, the tennis integrity unit has recently fined players for failing to report being asked to throw games, sets or matches.
Investigations into allegations of individual acts of bribery are notoriously complex and finding sufficient evidence can be difficult.
The Bribery Act 2010 replaces and enhances the UK's current patchwork of statutory and common law anti-bribery prohibitions. With increasing regulatory enforcement action against bribery and other forms of corruption, the impact of the Act is already being felt as organisations pre-emptively assess and tighten up their internal compliance programmes to mitigate as much as possible the risk of non-compliance and the severity of any sanctions should they fall foul of the law.
The Act sets out, in broad terms, four categories of offence:
- bribing another person;
- being bribed;
- bribing a foreign public official; and
- the failure of a "relevant commercial organisation" to prevent bribery by an associated person (the Section 7 Offence).
A relevant commercial organisation includes a company or partnership incorporated or formed in the UK or which carries on business in any part of the UK and an "associated person" is defined widely to include employees, agents and subsidiaries.
Offences (i) to (iii) can be committed by both a corporate entity and an individual, both of whom can be potentially liable for an unlimited fine and/or up to ten years' imprisonment. At the corporate level, action can be brought against "senior officers", such as directors and partners, where it can be demonstrated that the offence took place with their consent or connivance. The Section 7 Offence is punishable by an unlimited fine.
A bribery conviction can have wider implications for both individuals e.g. director disqualification, and business e.g. blacklisting from public procurement exercises.
The UK's approach to bribery law differs significantly in important respects from that of other jurisdictions e.g. that of the US under the Foreign Corrupt Practices Act (FCPA).
The territorial scope of the Act is extremely wide. The corporate offence of failing to prevent bribery can be committed by a relevant commercial organisation irrespective of where the bribe takes place. The other offences apply, and can be prosecuted in the UK, when they are committed in the UK but also where they are committed outside the UK by a person with a "close connection" with the UK. The concept of a "close connection" captures, for example, British citizens/residents and UK incorporated bodies and Scottish partnerships.
What should you do now?
- Carry out risk assessments and audit policies and practices to assess the nature of and to minimise the compliance risks thrown up by the Act, particularly in relation to the use of third parties such as agents, distributors and sub-contractors.
- Ensure adequate prevention procedures are in place - under the Act commercial organisations will have a defence to the Section 7 Offence if they can point to having "adequate procedures" in place to prevent unlawful conduct. The Secretary of State is required under the Act to provide guidance as to what "adequate procedures" actually means and the present government has indicated that it will issue guidance three months before the new law becomes effective.
- Ensure that any corporate code of conduct or ethics code reflects the Act as well as other relevant law, such as the FCPA.
- Directors and senior management should take a lead on implementing and maintaining an anti corruption culture.
- Brief employees about the Act and train staff on existing and new procedures.
- Check and update detailed procedures on gifts and hospitality, facilitation payments and vetting of external agents and suppliers.
Consultation - September 2010
The Government will launch a short consultation exercise in September on the guidance about procedures which commercial organisations can put in place to prevent bribery on their behalf.
This is expected to be published early in the New Year to allow affected organisations an adequate familiarisation period before the Act commences.
The consultation will be followed by a series of awareness-raising events to ensure everyone is aware of the changes the Bribery Act makes to the current law.