The Bribery Act 2010 is due to come into force in April 2011. Any commercial organisation which operates in the UK (whether registered in the UK or not) should be taking steps now to review or implement anti-bribery procedures and policies. Under the Act, the failure by a commercial organisation to prevent its employees, agents or subsidiaries from engaging in bribery can lead to an unlimited fine and, in some circumstances, personal criminal liability for directors and employees, who on conviction may be imprisoned for a period of up to ten years.
An organisation may avoid corporate liability where it can prove, despite a bribery offence having been committed, that it had 'adequate procedures' in place to prevent bribery. On 14 September 2010, the Ministry of Justice published a consultation paper setting out draft guidance based on six general principles, to help organisations implement 'adequate procedures' to prevent bribery. These principles are:
The guidance identifies 'key bribery risks' which may include:
- deficiencies in employee knowledge, training or skills;
- lack of clarity in the organisation's policy on gifts, entertaining and travel expenses;
- countries that have higher perceived levels of corruption;
- transactions involving charitable or political contributions, licences and permits, public
- procurement, high value projects with many contractors or involvement of intermediaries or agents;
- business partners located in higher risk jurisdictions, or where they have associations withominent public office holders.
Top level commitment
The guidance recommends:
- a public statement of commitment to counter bribery in all parts of the organisation's operation;
- appointing a senior manager to oversee the development of the anti-bribery programme.
The guidance gives three areas that due diligence should cover:
- location - organisations should check on the types of bribery most commonly encountered in the
- relevant location;
- business opportunity - due diligence should involve enquiring about the risks that a particular
- business opportunity raises (such as defining whether the opportunity has a legitimate objective
- and specification);
- business partners - due diligence on the individuals/organisations involved in the key decisions
and establishing whether they have reputations for bribery/have been or are being investigated or prosecuted for such offences.
Clear, practical and accessible policies and procedures
The guidance gives examples of what should be included within a company's policies and procedures:
- a clear prohibition of all forms of bribery;
- guidance on making physical contributions/charitable contributions and giving gifts;
- advice on relevant laws;
- guidance on what action should be taken when faced with blackmail/extortion;
- an explanation of the whistle-blowing process;
- information on anti-corruption programmes in the relevant sector.
The guidance suggests that a strategy should be established setting out:
- who is responsible for implementation of the policies;
- how the policies will be communicated internally and externally;
- how the policies will be incorporated into the training;
- processes to monitor the policies;
- a timescale for the implementation;
- a penalty system for breach of the policies;
- efficient review dates for the policies.
Monitoring and review
The guidance suggests:
- organisations should consider what internal monitoring and review mechanisms are required in
- order to ensure policies are effective;
- monitoring should include internal checks and balances as well as effective financial and auditing
- controls to pick up any irregularities;
- the extent of monitoring depends on size of organisation. Larger organisations may wish toconsider external verification by an independent body.