With the UK Bribery Act 2010 now in force and the government's "adequate procedures" guidance now published, Transparency International (TI) have produced a consultation on guidance for anti-bribery due diligence in transactions, intended as a practical tool for companies undertaking such due diligence in the course of mergers, acquisitions and investments. Although it is recognised that anti-bribery due diligence is largely undertaken to comply with legal obligations, the guidance encourages the adoption of a 'best practice' approach in order to avoid both legal liabilities and financial and reputational damage. TI envisage that this approach will ultimately help create a level playing field for businesses whereby market distortions caused by bribery are effectively eliminated.

The guidance outlines the following principles of good practice in conducting anti-bribery due diligence: 

  • It should be carried out for all but the smallest investments 
  • It should be conducted with sufficient depth and resources to ensure it is undertaken effectively 
  • It should be carried out sufficiently early in the due diligence process in order that it may influence the outcome of negotiations and allow further investigation 
  • Oversight of the due diligence process should be provided by the partners or the board, such that findings are fully examined and understood at the highest levels of decision making during the transaction 
  • Bribery detected through due diligence is reported to the authorities 
  • Information gained during the anti-bribery due diligence is passed on efficiently and effectively to the company's management once the investment has been made, so that remedial action can be initiated if necessary.

The guidance lists the following five broad areas for attention in the due diligence process, supplemented by a detailed checklist of indicators:

  • Whether bribery has taken place in the past 
  • How possible or likely is it that bribery is currently taking place 
  • If it is taking place, how widespread it is likely to be  Whether the target has an adequate anti-bribery programme in place 
  • The likely impact if bribery, historical or current, were discovered after the transaction had completed.

The consultation invites respondents to consider whether the guidance offers sufficient practical help for due diligence and whether there are other areas that should be addressed. Responses must be received by 15 September 2011.

The consultation can be accessed here: http://www.transparency.org.uk/publications/250-ti-uk-due-diligence-consultation/download