In a previous e-bulletin article we provided an overview of the Bribery Act 2010 which replaces and enhances the UK's existing anti-bribery regime. The Government announced in July 2010 that the Act will come into force in April 2011.
On 14 September 2010 the Ministry of Justice launched an 8-week public consultation on draft guidance on preventing bribery. The deadline for responses to the consultation is 8 November 2010. The Government aims to publish the final version of the guidance at the beginning of 2011.
The establishment of adequate procedures is a critical issue for a "relevant commercial organisation" under the Act. Under section 7 of the Act a relevant commercial organisation can face prosecution for failing to prevent bribery by an "associated person". It will be a defence for a commercial organisation to show that it had adequate procedures in place to prevent unlawful conduct. The term "relevant commercial organisation" captures UK incorporated companies and partnerships which carry on a business in the UK or elsewhere as well as non-UK corporate bodies and partnerships that carry on business in the UK. The term "associated person" is widely defined and includes any person who performs services for or on behalf of a relevant commercial organisation including an employee, agent or subsidiary.
The Government's draft guidance outlines six general principles which it considers should form the basis of procedures put in place by commercial organisations to prevent bribery:
- A regular and comprehensive risk assessment should be carried out that assesses the nature and extent of the risks relating to bribery to which the organisation is exposed.
- There should be top level (management) commitment to preventing bribery and establishing a culture in which bribery is never acceptable.
- Appropriate due diligence procedures should be in place that cover all parties to a business relationship and all markets in which the organisation does business.
- The organisation should have in place clear, practical, accessible and enforceable policies and procedures to prevent bribery being committed on its behalf.
- There should be effective implementation of anti-bribery policies and procedures and these should be embedded throughout the organisation.
- Monitoring and review mechanisms should be in place to ensure compliance with relevant policies and procedures and to identify any issues as they arise.
The draft guidance does not contain prescriptive rules nor does it impose any direct obligations on organisations. Rather it envisages, as is evident from the illustrative scenarios that accompany the guidance, that what constitutes "adequate procedures" will depend on the facts and circumstances of a particular case and may differ depending on the size of an organisation and the nature of its activities. The guidance suggests certain procedures that an organisation may wish to consider putting in place in relation to each of the above principles. It is likely that the final guidance, while offering a useful template and necessary scheme of reference for commercial organisations, will not provide a detailed ready-made compliance programme that avoids the need for rigorous self-assessment.