On May 6, 2014, the British Bankers’ Association (“BBA”) – the U.K.’s leading association for the banking sector – published a 51-page guide entitled “Anti- Bribery and Corruption Guidance” (“the Guidance”).1 While BBA guidance issued in December 2011 had focused on adequate policies and procedures under the U.K. Bribery Act 2010 (“the Act”),2 the new Guidance also provides meaningful direction with respect to regulatory requirements and other guidance issued by the Financial Conduct Authority (“FCA”), which regulates financial institutions.
The Guidance emphasizes that “the anti-bribery responsibilities of banks do not end with the U.K. Bribery Act.”3 The Guidance notes that banks need to be aware of obligations owed to the FCA in addition to those of the Act, stressing that these are not always identical. Banks and other regulated companies should be mindful that the FCA can take regulatory action against entities and individuals performing controlled functions for failing to address adequately the risk of corruption or bribery.4 The FCA does not require proof of actual or attempted corruption or bribery, which would be necessary for a conviction under the Act.5
Whereas the FCA’s Chairman has stressed that the agency will increasingly look towards the “tone in the middle” to improve ethical standards,6 the Guidance follows the Act’s focus on setting a “tone from the top.”7 The BBA presents three examples of how companies can foster such an attitude from management: (1) introducing “business line champions,” e.g. nominating senior managers to be responsible for anti-bribery work in their business; (2) publishing online the company’s anti-bribery policies; and (3) ensuring senior management is equipped to fulfill its role in assisting with anti-bribery actions.8 In affirming the need for banks to keep abreast of anti-bribery and anticorruption compliance developments, the Guidance refers to the Parliamentary Commission on Banking Standards’ recommendations on banks’ whistleblower obligations and notes the FCA’s support for these principles, which include an enhanced role for board members in their firms’ whistleblowing regime.
The Guidance also offers a number of practical recommendations on governance structures and implementation programs to assist the banking sector in addressing bribery and corruption. To identify bribery risks and effectively develop anti-bribery procedures, the Guidance urges banks to undertake periodic risk assessments of their business as a whole. The BBA notes that “there is no exact science” as to what a risk assessment should include or how it should be done; the BBA points to the range of resources available for companies to draw from, specifically mentioning the 2013 Transparency International publication “Diagnosing Bribery Risks – Guidance For The Conduct of Effective Risk Assessment.”9
The BBA further calls on banks to conduct due diligence on third parties, given that both the Act and FCA permit a firm to be held liable “for corrupt payments made, offered, or promised by In this regard, the Guidance recommends monitoring a variety of red flags and accurately recording due diligence results.
More broadly, the Guidance highlights clear written policies regarding gifts and hospitality, a system of monitoring and reviewing a bank’s policies, employee training on bribery prevention, and a bribery-specific policy for managing incidents as important means for implementing procedures that seek to ensure compliance.
Although considerable revisions have been made to its earlier guidelines, the BBA’s message remains straightforward: ensure that corporate procedures reflect current legislation, regulations, and recommendations. Some of the BBA’s commentary is directed at banks in particular, but the underlying principles are broadly relevant to all companies, whether or not in the regulated financial sector.