On 30 March, the Ministry of Justice published the long-awaited guidelines to help businesses work out what they have to do to ensure that they comply with the complex requirements of the new Bribery Act 2010. The new Act is due to come into force on 1 July 2011 but opinion remains divided as to whether the guidelines will genuinely help businesses determine exactly what they are required to do to avoid falling foul of the new law and the stiff penalties it imposes.
One area that has been clarified is how the Act might apply to corporate gifts and entertainment and when these would be considered to amount to bribery. In simple terms, hospitality or gifts are unlikely to give rise to difficulties unless they are given with the intention of persuading the recipient to improperly award business to the provider and are not likely to be considered criminal where they are genuine and are merely provided to further develop a business relationship. That said, the guidance encourages businesses to review their policies on hospitality as part of their implementation of anti-bribery prevention measures.
Also of concern was whether the Act would change existing laws relating to "facilitation payments" that are, some have contended, almost expected as part of everyday business in certain parts of the world. The guidance is clear on this issue in that facilitation payments remain illegal.
What about where a business uses the services of agents or sub-contractors where the actions of that person or organisation are difficult to monitor as part of an ongoing business relationship? On this issue, the guidance suggests that anti-bribery terms and conditions be included as part of the documents which underpin such a relationship so as to clearly establish duties and responsibilities. There will also be heavy emphasis on due diligence when entering new markets, which could have consequences for businesses considering acquisitions and joint ventures overseas.
More generally, the guidelines introduce a risk based approach to assessing whether a business has 'adequate procedures' to prevent bribery by setting out six principles that businesses should follow, namely:
- Proportionate procedures.
- Top level commitment.
- Risk assessment.
- Due diligence.
- Communication (including training).
- Monitoring and review.
On a practical level, it will include businesses establishing an anti-bribery policy and ensuring that employees receive training on it. It also includes having the board of directors make an anti-bribery statement that they go on to actively promote throughout the organisation. Even a simple measure such as having hospitality authorised by senior management if it costs more than a certain amount will help a business protect itself.
Ironically, the guidelines say that they are not intended to force businesses to take advice on how to comply with the Act. However, by increasing the number of issues that a business needs to consider to ensure compliance, the Ministry of Justice may have left businesses with little choice other than to take advice.
Full details of the guidelines can be found here.