The UK Ministry of Justice (MoJ) has today published for consultation its draft guidance on implementing ‘adequate procedures’ to prevent bribery under the Bribery Act 2010 (which is due to come into force in April next year). The MoJ’s consultation document is available here.
The eight-week consultation period ends on 8 November 2010, before which a number of consultation meetings will be held across the UK. Two additional documents are expected shortly: (1) an MoJ circular providing more detail on the Bribery Act’s provisions; and (2) guidance for prosecutors drawn up by the Director of Public Prosecutions and the Serious Fraud Office.
The draft guidance published today is structured around six non-exhaustive ‘Principles for Bribery Prevention’, supported by some practical examples including those concerning hospitality and promotional expenditure, dealing with third parties and facilitation payments. The six principles are:
- Risk Assessment: regular and comprehensive assessment of the nature and extent of the bribery risks to which a business is exposed.
- Top Level Commitment: top level management commitment to establishing a no-bribery culture and communicating anti-bribery policies to all levels of management, staff and external suppliers.
- Due Diligence: due diligence policies covering all external contract parties in all markets, including implementation of reciprocal anti-bribery agreements.
- Clear, Practical and Accessible Policies and Procedures: appropriate policies and procedures to prevent bribery being committed on a company’s behalf, which apply to all people and entities over which a business has effective control.
- Effective Implementation: policies which are embedded within the business and reflect the particular bribery risks it faces.
- Monitoring and Review: mechanisms to ensure compliance and deal with issues, and which are updated when appropriate.
The draft guidance has been designed to assist businesses of all sizes. It is, however, likely to be of most assistance to small and medium-sized businesses who may be less familiar with the issues thrown up by the Bribery Act and/or may not have existing anti-bribery policies and procedures in place. Larger organisations may feel that the guidance, while useful, leaves significant areas of uncertainty unresolved. For example, little in the way of concrete guidance has been provided in known areas of concern for business, such as specific and practical steps to establish adequate procedures, the extent to which a company’s procedures will effectively need to be imposed on third parties with whom they do business, and issues of so-called prosecutorial discretion surrounding technical breaches of the Act (including in respect of facilitation payments).
The draft guidance does, however, appear to provide some comfort that reasonable and proportionate corporate hospitality or promotional expenditure will not be criminalised by the Bribery Act unless intended to induce a person to perform a function improperly or to influence a public official in the conduct of their duties and thereby secure business or a business advantage.
We will be responding to the MoJ’s consultation and would be pleased to receive any views or contributions from you for inclusion in our response (attributed or otherwise).
A more detailed analysis of the draft guidance will follow.