The new UK Bribery Act is due to come into force in April 2011. In preparation for its introduction, the UK government is holding a public consultation on guidance to be issued covering procedures which commercial organisations can implement to prevent bribery. The consultation will be followed by the publication of guidelines on such procedures in early 2011. This is done with a view to allowing companies sufficient time to address their compliance systems before the Act itself comes into force. Both the consultation and guidelines should assist companies to assess whether their procedures and systems to prevent bribery are compliant and sufficient to act as a defence.
As previously discussed,1 section 7 of the Bribery Act creates a new strict liability, corporate offence which can potentially render any company that does business in the UK liable for failing to prevent bribery. The only defence available appears to be for the company to show that it had adequate procedures in place to "prevent" not simply to minimise or detect bribery.
The draft guidance issued for consultation under section 9 of the Act (available by clicking here) is broken down into six principles on which that commercial organizations are well advised to focus in implementing anti-bribery procedures. The first is "Risk Assessment" including knowing and keeping up to date with the specific risks the company faces in its day to day operations. The next is "Top Level Commitment", often referred to as the "Tone at the Top", with a cultural message across and down throughout the organization and its affiliates that bribery in any form is not acceptable. Third comes "Due Diligence" or knowing with whom the company does business and where its money is going, and assuring that relationships are transparent and ethical. The fourth principle is "Clear, Practical and Accessible Policies" adopted to deal with specific situations, such as requests for entertainment, facilitation payments or charitable contributions, and that specify what to do when bribery comes to light. Next we find "Effective Implementation" or going beyond paper compliance to action inculcating the ethic throughout the organization. Finally, we find "Monitoring and Review", including internal and external auditing, periodic policy reviews and transparency. The consultation seeks comments on whether these six principles are sufficient, and whether there are other principles or procedures that should be considered as part of the governments anti-bribery strategies. To aid the consultation, a number of discussion seminars are being held around the UK in September and October. Details of are available by clicking here. The consultation started on 14 September and is open until 8 November 2010.
The Act clearly sets a high bar on company procedures, policies and systems. This is arguably consistent with strict liability for Section 7 offences and the general intent and purpose of the Act. However, since the Act itself provides little indication of what is considered adequate or satisfactory, the purpose of the public consultations is to allow companies and other interested parties to have some input before formal guidance is provided by the government on these points. All stake holders are well advised to review the draft guidance and the consultation documents and to take part and have their voices heard as to issues and problems foreseen, practicalities and other impact and results-related outcomes.
Finally, it should be kept in mind that regardless of the outcome of the consultations, the guidance eventually issued will be advisory only. Compliance with the government’s guidance will not constitute a defence ipso facto, and will only be one element the UK courts will consider in deciding on the individual merits whether the defence as been made out on the facts before it.