Why has the Act been introduced?
The Bribery Act was given Royal Assent on 8 April 2010. It was introduced due to the fact that previous legislation had become outdated and could not cope with the complex bribery cases that the UK has played host to in recent years. In fact, some of the previous legislation that was relied on to combat the hundreds of millions of pounds lost to the UK economy, because of bribery, dates back as far as 1889!
What does the Act prohibit?
The Act makes it an offence to offer or receive a bribe. It also prohibits bribing a public official and, most alarmingly for business owners, introduces strict corporate liability if Companies fail to prevent one of their employees committing an offence under the Act. The Act defines making or receiving a bribe as offering or promising financial gain to secure an advantage, or, accepting a financial or other advantage to perform a function or activity improperly. The offence of bribing a Foreign Public Official ("FPO") is triggered when a person promises or offers financial or other advantage to an FPO to act in their official capacity to secure an advantage for them. The strict liability offence for failing to prevent a bribe is particularly concerning for employers. This covers situations where employees or anyone associated with an organisation commits an offence under the Act. In this instance, the Company is liable for the employee's actions and is vulnerable to the severe penalties. The best defence to this is for the Company to show that it has adequate procedures and policies in place to prevent bribery offences. It is essential that all Companies have adequate policies in place or risk having imposed upon them unlimited fines.
What are the penalties?
The offences of bribing another person; being bribed or bribing an FPO are punishable by an unlimited fine, imprisonment of up to ten years or both! The new strict liability corporate offence of failure to prevent bribery is penalised with an unlimited fine. The penalties under the new Bribery Act are much more severe than those imposed under the comparative American Legislation, the Foreign Corrupt Practices Act.
How would a Company defend itself?
Ignorance of the bribery is not a defence. If a Company is charged under the Act the only defences open to it would be to demonstrate the payment was lawful in the jurisdiction in which it was made; the conduct was necessary to assist the armed forces on active duty; or the Company is able to show that it had in place adequate procedures to prevent bribery. The latter of these defences is vital.
Companies should check their current policies on bribery immediately.