The Bribery Act has been introduced as a result of pressure to reform the law regarding bribery and corruption in the UK as the current law is out of date, ineffective and not suitable for the modern global economy. The purpose of the proposed legislation is to simplify the law on bribery and to allow a more effective response to bribery offences that occur either in the UK or abroad.
The Bribery Act is expected to come into force in stages between June and October 2010.
Offences Covered By The Act
1. Offence of bribing another person (also called the "active offence") - Where a person offers, promises or gives a financial or other advantage to another person to perform improperly a relevant function or activity, or to reward a person for the improper performance of such a function or activity. It does not matter whether the person given the bribe is the same person who will perform the function or activity concerned.
2. Offence of being bribed (also called the "passive offence") - Where a person receives or accepts a financial or other advantage to perform a function or activity improperly. It does not matter whether the recipient of the bribe receives it directly or through a third party, or whether it is for the recipient's benefit or not.
3. Bribery of a Foreign Public Official - Where a person directly or through a third party offers, promises or gives any financial or other advantage to a Foreign Public Official ("FPO") in attempt to influence them in their capacity as a FPO and to obtain or retain business, or an advantage in the conduct of business.
4. Corporate offence: failure to prevent bribery - A commercial organisation could be guilty of bribery where a person associated with the organisation bribes another person intending to obtain or retain business for the organisation or to obtain or retain an advantage in the conduct of business for the organisation. Persons "associated" with the organisation could potentially include employees, agents, sub-contractors and joint-venture arrangements (amongst others).
Punishment For Offences
The offences of bribing another person, being bribed and bribing a foreign public official are punishable either by an unlimited fine, imprisonment of up to 10 years or both.
The new corporate offence of failure to prevent bribery is punishable by an unlimited fine.
Is There A Defence To Bribery?
The only likely defence to the new corporate offence of failure to prevent bribery is to show that the organisation had adequate procedures in place to prevent employees or agents committing bribery. This defence cannot apply where it has been proved that a senior officer of the organisation has consented to the offence and both the company and the senior officer will be guilty of the offence. The government will issue guidance in due course on what constitutes adequate procedures; however it is anticipated that this will form a set of principles rather than an in depth guidance material.
The only other defences to any other bribery offence is where a person charged with a bribery offence can prove that the conduct was necessary for the proper exercise of any function of an intelligence service or the armed forces when engaged in active service; or where the bribery was specifically authorised by some written law.
When Should Companies Start Preparing?
Lack of knowledge of the new bribery laws is not a defence to a bribery offence so companies must prepare themselves now. Although government guidance on the defence of adequate procedures has not yet been published, organisations should consider reviewing their existing compliance procedures including a review of their policies relating to hospitality and political contributions and conducting training and a review of contractual arrangements with employees and agents and joint venture arrangements. In addition to this organisations should review their procedures for disciplinary action; selection of agents or business associates and the reporting of suspected bribery activities. Where such policies and procedures and training are not already in place, they should be put in place as a matter of some urgency. The implementation of such policies and procedures will be important to any organisation's compliance as will on-going training.
Policies required to ensure compliance with the new bribery laws will depend on the nature and structure of each organisation, therefore, organisations are encouraged to seek guidance at the earliest opportunity