As the UK Bribery Bill becomes law, companies are encouraged to implement rigorous training and compliance programmes in order to benefit from the “adequate procedures” defence.
On 8 April 2010 the UK Parliament passed into law the Bribery Act 2010 (UK Bribery Act), which contains some of the most far-reaching anti-bribery laws in the world. The UK Bribery Act had been made a priority by the UK Government, following criticism that the prior laws were antiquated and overly-complicated. The enactment of the UK Bribery Act has set up important new compliance requirements that will need to be addressed by all corporate entities in the coming weeks, months and years.
The UK Bribery Act has arguably now gone further than the former benchmark in international bribery legislation, the US Foreign Corrupt Practices Act 1988 (FCPA). The UK Bribery Act focuses on anti-corruption with respect to governmental and non-governmental officials, making any form of bribery illegal. It also bans many "facilitation payments" (also known as "grease payments"), unless such payments are expressly permitted by written law in the country where they occur. This reflects the recommendations of the Organisation for Economic Cooperation and Development (OECD) at the end of 2009, which specifically focused on the need to eliminate "facilitation payments" from business practices. For more information on the OECD recommendations, please see: http://www.mwe.com/info/news/ots0210h.htm
Moreover, if a bribery offence is committed by a corporate with the "consent or connivance" of a senior officer (including director, manager, secretary and other similar officer) of the same entity, then the senior officer also is guilty of an offence and will be punished accordingly.
Failure of Commercial Organisations to Prevent Bribery
The most significant change that will effect businesses is a new offence of "failure of commercial organisations to prevent bribery". Under these new provisions, a commercial organisation is guilty of an offence if a person associated with the organisation bribes another person, with the intention of obtaining or retaining business or an advantage in the conduct of business. The defence to this offence is for the commercial organisation to prove that it had adequate procedures in place to prevent persons associated with it from carrying out such conduct.
Punishments for offences under the UK Bribery Act can include 10 years imprisonment and an unlimited fine.
The UK Bribery Act is expected to bring compliance to the forefront of all UK businesses, as they will need to show that they have compliance programmes and training in place that are sufficiently rigorous to allow them to avail of the "adequate procedures" defence. Whilst the Government is required under the UK Bribery Act to publish guidance as to what it considers "adequate procedures" to be, there is no clear time limit within which this needs to be provided. Stakeholders hope it will be published soon, although realistically it seems unlikely to be in place prior to the United Kingdom's 6 May general election, following which there may be a new government with new priorities. Many businesses are therefore expected to launch immediate reviews of their compliance policies, with a view to putting in place the most rigorous training programmes they can. At present, this seems likely to follow, but also go further than, the FCPA training that is standard for US companies with foreign operations.
The full text of the UK Bribery Act 2010 can be located here: http://www.opsi.gov.uk/acts/acts2010/ukpga_20100023_en_1
The previous McDermott publication on the Bribery Bill, from December 2009, can be located here: http://www.mwe.com/info/news/ots1209b.htm