Summary and implications
Bribery laws in the UK are set for a significant overhaul if the Bribery Bill can be rushed through parliament before the General Election. The Bill has already passed through the House of Lords (where it originated) and went to Committee stage in the House of Commons on 16 March 2010
We expect that all commercial organisations will need to review their current anti-corruption policies, procedures and training to ensure that the organisation has taken all appropriate steps to prevent others committing bribery on behalf of that organisation.
If the Bribery Bill becomes law:
- all existing bribery offences will be repealed;
- there will be two new general offences of “active” and “passive” bribery;
- there will be further new offences of bribing a foreign public official (an 'FPO') and (for corporate entities only) of failing to prevent bribery;
- individuals convicted of any of the new offences will face a penalty of up to 10 years imprisonment and corporate entities will be liable to an unlimited fine for failure to prevent bribery.
If enacted, this legislation would send out a clear message that the government is taking acts of corruption and bribery seriously and commercial organisations will be forced to ensure that acts of bribery are not committed on their behalf.
Active and passive bribery
Active bribery means giving, promising or offering a bribe. Passive bribery is requesting, agreeing to receive or accepting a bribe.
A bribe in this context may occur where a “financial or other advantage” is given or received where this is linked to “improper performance” of a work-related function. This includes giving an advantage in the knowledge that the acceptance of the advantage alone would be an “improper performance” of a work-related function. The scope of these offences is intentionally broad and will apply not only to cash inducements, but also to gifts and other advantages.
Bribery of FPOs
This offence applies to bribes which are given with the intention of influencing the FPO in his official capacity. The person giving the bribe must also intend to obtain or retain business or an advantage in the conduct of business. The definition of FPO includes anyone who holds a legislative, administrative or judicial position of any kind, or who exercises a public function for any country, public agency or public enterprise, or who is an official or agent of a public international organisation.
Failing to prevent bribery
A corporate entity can be found guilty of the above offences. In addition, a commercial organisation can be guilty of an offence if a person associated with that organisation bribes another with the intention of obtaining or retaining a business advantage for the organisation. There is a defence for the organisation if it can show that it had in place adequate procedures designed to prevent bribery. A person is associated with an organisation if that person performs services on behalf of the organisation. This is a very broad definition and can include not only other entities within the group and their directors and employees, but also consultants and agents.
The UK courts will have jurisdiction to prosecute an offence under the Bill if any part of the offence takes place in the UK or the offence takes place outside of the UK but is committed by a person with a close connection with the UK, which includes UK nationals and companies incorporated in the UK. Any corporate entity, whether or not incorporated in the UK can be guilty of the corporate offence if it does business in the UK, even if the act of bribery itself was committed outside the UK. This means the UK Courts will in theory have jurisdiction to prosecute offences of bribery which have been committed outside the UK by non-UK corporate entities.
Preparing for the new law
Currently there is no guidance as to what is meant by “adequate procedures”. This is clearly unsatisfactory for corporate entities wanting to make use of this defence. However, the Secretary of State is required to publish guidance regarding what this means and has indicated that this will be published before the Bill comes into force. It is assumed that “adequate procedures” will be determined in a proportionate manner so that the compliance standard applicable to a large multinational will not be the same as for a small company. However, this does mean that all organisations, regardless of size, will need to review their anti-corruption policies and procedures to ensure they are effective and appropriate. Things to consider include policies on giving gifts, corporate hospitality and political contributions. Organisations will need to provide appropriate training and ensure that structures are put in place so the policies are enforced by relevant departments such as Compliance, Audit, HR and Legal.