The Bribery Act 2010 (the Act) repeals previous legislation on bribery, abolishes the common law offence of bribery, and establishes a new statutory regime. The scope of the Act is wide; it has a broad extra-territorial application; penalties are high: for individuals, a maximum prison sentence of 10 years and/or an unlimited fine and for commercial organisations an unlimited fine.

The Act creates a new offence which may be committed only by a commercial organisation: where someone who performs services on its behalf bribes another person to obtain or retain either business or business advantage for the commercial organisation. No offence will be committed if the commercial organisation can prove that it had “adequate procedures” in place to prevent bribery by an associated person. There is statutory guidance (from the Ministry of Justice) on what may amount to “adequate procedures”. These will reflect the nature, scale and complexity of the organisation’s business activities and would include risk-based due diligence and the use of anti-bribery terms and conditions.

Transactions – main impact

Liability under the Act results from behaviour, so the main impact of the Act is in ensuring that you have proper procedures, policies and training in place to prevent bribery occurring. These must be reviewed and updated where necessary to reflect any changes to business practices or your risk profile.

Due diligence on joint venture partners and on target entities on acquisitions will be important. And whilst liability cannot simply be avoided by contract terms, contract terms may be relevant as part of the adequate procedures defence. This would include mutual undertakings on anti-corruption in joint venture agreements and undertakings from the service provider in management, operator, agency and service agreements.