The new UK legislation, The Bribery Act 2010 will have implications for Australian businesses with commercial dealings in the United Kingdom from July 1, 2011.

Australian companies with operations in the UK should note that the new laws will prohibit business offering or giving of a financial or other advantage to both government officials and businesses.

The Act removes the requirement of a corrupt intention and makes companies strictly liable for bribery committed by persons or entities acting for it, through the ‘failure of commercial organisations to prevent bribery’ offence in section 7(1) of the Act. Liability can extend to the company as a result of actions taken by employees, agents and subsidiaries or any other entity who performs services on behalf of the company.

Companies which have in place adequate procedures to prevent individuals and entities from engaging in bribery on behalf of the firm will have a complete defence to the charge of failing to prevent bribery.

Such procedures are envisaged to include establishing a company policy on the provision of gifts and keeping records of relevant transactions. Training on the company policy and audits for compliance are also expected to be relevant components in establishing a defence.

Senior officials in Australian organisations could be personally liable for offences committed by their company if they have consented to bribery committed within the UK.