The UK Bribery Act, which comes into force today, is one of the most significant statutes enacted in the last 10 years. The Act establishes a criminal offence for non-compliance, with heavy penalties including unlimited fines and prison sentences.
Have you ensured your compliance?
This overview of the Act provides you with the knowledge you need to avoid falling foul of the law.
1. What are the offences under the Act?
The Act introduces four main offences:
- Making bribes;
- Receiving bribes;
- Bribery of foreign public officials; and
- The corporate offence of failing to prevent bribery (where the only defence is of having ‘adequate procedures’ in place to prevent bribery).
2. What are the penalties?
- Companies – an unlimited fine
- Individuals – up to 10 years imprisonment, an unlimited fine or both
- Companies who are involved in public contract work could be debarred from tendering for public procurement contracts
- Directors may also be subject to a variety of risks, including prosecution as an officer of a company involved in bribery, and potentially disqualification from acting as a director
3. Are you liable for the actions of other people you work with?
Companies can be liable where offences are committed by their employees, joint venture partners, contractors or agents as the Act imposes liability for the acts of ‘associated persons’, which is very widely defined.
To take advantage of the ‘adequate procedures’ defence against this risk, a company will have to have established robust policies and procedures to show it has a culture resistant to bribery and corruption, and systems in place to enforce that culture.
4. What about corporate hospitality and facilitating payments?
The Guidance that the Ministry of Justice have published to accompany the Act states that reasonable and proportionate hospitality and promotional expenditure is acceptable. Corporate hospitality within reasonable bounds is therefore allowed, but there is no carve-out for “facilitation payments”.
5. Does the Act apply outside the UK?
The first two offences (of bribing and receiving bribes) can be committed outside the UK, but only where the party involved has a close connection with the UK. The offence of bribing a foreign official will in many cases take place overseas, but to be prosecuted by the UK authorities under the Act, the briber will also have to have a close connection with the UK. In each case that would require being a British citizen, or being ordinarily resident here, or incorporated in the UK.
The corporate offence of failing to prevent bribery can be committed by any UK incorporated body, UK formed partnership, or any foreign body corporate or partnership that carries out business or part of a business in the UK. This is regardless of whether the relevant conduct takes place in the UK or elsewhere and whether the bribery is done by a UK person or not.
6. What can you do to reduce your risk?
Companies need to ensure they can bring themselves within the adequate procedures defence to the corporate offence of failing to prevent bribery. This will require the introduction and implementation of appropriate anti-bribery and corruption policies and procedures.