After a long wait, the Ministry of Justice (MoJ) has now published the final version of the adequate procedures guidance ["the Guidance"] required by section 9 of the Bribery Act 2010 ["the Act"].
So how does this affect me?
We have set out a short summary of what we consider to be the top six points to note, hot off the press.
- How you respond to the Act is 'your' responsibility
The Guidance does not contain precise criteria that need to be satisfied to ensure that your business is protected from liability. However, by taking on the responsibility of considering and addressing what you consider to be the risks that your business might face you will, in most cases, be better positioned to avoid liability.
- Follow the six principles
The Guidance sets out six non-prescriptive principles that should inform the proportionate response that companies take to ensure that they have adequate procedures in place. These are:
- Proportionate procedures
- Top-level commitment
- Risk Assessment
- Due Diligence
- Communication and Training
- Monitoring and Review
You can contact us to discuss these and how they might be applied to your business on a daily basis to help avoid any liability.
- Deciding if your business is a "commercial organisation" under Section 7
The Guidance makes clear that the test for the court for whether or not a business is within the definition of a "commercial organisation" (whether they are carrying on business or part of a business in the UK) will be "answered by applying a common sense approach". This will be relatively clear cut for businesses incorporated (by whatever means) in the UK. For businesses incorporated or formed outside of the UK, the same common sense approach will apply. However, the MoJ anticipates that as a result of this approach, businesses that do not have a demonstrable business presence in the UK would not be caught. It will depend on the facts and circumstances. If in doubt, contact us.
- The scope of associated person under Section 7
Whilst the scope of "associated person" (i.e. whether a person or organisation performs services for you) may be broad, the proper analysis to be undertaken will consider all the facts and circumstances. Therefore, for example, the mere existence of a joint venture relationship will not, of itself, mean that it is associated with any of its partners. The court will look into all relevant aspects including the details of the relationship (whether it is separate legal entity or operating through a contractual arrangement), the nature of the services provided, and the control that the other partners have. If you feel this might affect your business then please get in contact with us.
5. You should still be able to entertain your customers
The Guidance offers some comfort in this regard.
"Bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an established and important part of doing business...The Government does not intend for the Act to prohibit reasonable and proportionate hospitality and promotional or other similar business expenditure..."
Despite this general statement, the Guidance does make clear that corporate hospitality could still constitute bribery in certain circumstances. If you are concerned, then we would be happy to discuss with you how your marketing activities may be affected by the Act.
- Facilitation payments are a risky business
Although the Guidance recognises the pragmatic issues that businesses face, facilitation payments remain illegal under English Law. The Guidance does not resolve this conflict itself, but states that this will be an issue to be determined by the prosecutors. The Prosecution guidance produced by the SFO and DPP states that, in relation to facilitation payments, the factors to be considered include the value and frequency/repetition of payments, whether there has been a clear breach by an individual of a corporate policy prohibiting such payments, and whether the incident has been self reported.
This remains an unsatisfactory position leaving the decision with the commercial organisation with no real comfort of knowing how the prosecutor will exercise its discretion. If you are concerned about how this might affect your business, please contact us to discuss the issue further.