The UK Ministry of Justice announced yesterday that the Bribery Act 2010 will come into force on 1 July 2011.
The Bribery Act creates four offences: active bribery, passive bribery, bribing a foreign public official and the corporate offence under section 7, under which commercial organisations can be prosecuted for failing to prevent persons associated with them from bribing another person on their behalf.
The scope of the section 7 offence includes companies that are incorporated in the UK as well as any body corporate, wherever incorporated, that carries on business or part of a business in the UK. The jurisdiction of the English courts under the Act is therefore very broad and the Act is potentially applicable to many businesses operating in Southeast Asia. Corporates successfully prosecuted for the section 7 offence are exposed to an unlimited fine. Where corporates are found to have committed the other offences with the consent or connivance of directors/senior officers of the company, those officers are exposed to unlimited fines and imprisonment for up to 10 years.
An organisation can establish a full defence to prosecution under section 7 if it can show that it had adequate procedures in place to prevent such bribery occurring. The Ministry of Justice has now published guidance on what amounts to "adequate procedures" for the purposes of section 7.
The guidance can be found here.
The new guidance sets out a series of six principles that should be considered by organisations in drawing up their anti-bribery procedures and expands on draft guidance issued by the UK Government in late 2010, which had been criticised for not giving businesses enough certainty about what was or was permitted. The new guidance notes, for instance, that having a UK subsidiary will not, in itself, mean that a parent company is carrying on business in the UK, since a subsidiary may act independently of its parent or other group companies. It also clarifies that the Act is not intended to criminalise bona fide hospitality and promotional expenditure, such as entertaining clients at sporting events.
In addition to the adequate procedures guidance, the Serious Fraud Office and Director of Public Prosecutions have also published joint prosecution guidance setting out guidance on when prosecution under the Act will be appropriate. A number of factors are set out that will be relevant in deciding whether to bring a prosecution, including the number of bribery incidents that took place and whether the company involved has self-reported the offence and taken steps to prevent a re-occurrence.
The prosecution guidance can be found in full here.