With less than a month to go until new laws to prevent bribery come into force, Howes Percival is warning firms to act now to ensure that they are compliant.
The Bribery Act 2010, which comes into force on 1 July 2011, creates for the first time an offence of failure by a commercial organisation to prevent bribery. It also creates general offences of bribing another person, of being bribed and of bribing a public official. The Act is far reaching and extends the crime of bribery to cover all private sector transactions, including gifts, sponsorship and hospitality. A serious breach of the rules could result in a ten year prison sentence and/or an unlimited fine. The only defence a company will have is if it can show ‘adequate procedures’ were in place to prevent bribery.
Howes Percival commercial litigation solicitor, Steven Boast said: “From July, anti-corruption law will be tougher and without adequate procedures, your company will be exposed. The new legislation will affect businesses of all sizes, in all sectors - with significant penalties for breaching the rules.
“Companies should view bribery and corruption as business risks and assess the specific risks to their business, ensuring that they develop and implement new anti-corruption procedures appropriate to the risks identified. These policies should be clearly communicated to staff and training undertaken as appropriate.”
Steven Boast concluded, “Acting now is the safest way to protect your business. A good starting place is The Ministry of Justice’s guidance note on the Act, which works through a number of case studies on hospitality, facilitation payments and joint ventures to help organisations understand the sorts of procedures they can put in place to prevent bribery. The Ministry of Justice has also published a ‘Quick Start’ guide on the Act, specifically aimed at helping small-to-medium sized enterprises familiarise themselves with the new requirements.”
Howes Percival has also produced the following checklist for companies to help them prepare for the new requirements:
Lead from the top and take a clear anti-bribery stance:
Ensure senior staff are at the forefront of fostering a culture in which there is a zero tolerance approach to bribery. Appoint a member of senior management to be responsible for overseeing anti-corruption within the organisation.
Assess your risks:
Undertake a risk assessment to fully understand the bribery risks your business faces. Carry out due diligence on customers, suppliers and employees.
Have clear policies:
Revise disciplinary procedures to include the definition of what is considered to be bribery under the Act and make it clear that employees will be disciplined for any acts of bribery (including requesting or accepting bribes).
Where corporate gifts and hospitality are common place, develop and implement a gifts and hospitality policy providing guidance to employees relating to the giving and receiving of gifts and entertainment. Consider putting in place a gifts and hospitality register.
Ensure that there are effective 'whistleblowing' procedures for any employee to report incidents or allegations of bribery, as well as a procedure for the thorough investigation of any such allegations.
Monitor and review policies and ensure that clear records are kept.
Communication and training:
Communicate new policies and procedures to all staff and provide training on anti-corruption especially for those involved in processing payments or who travel abroad for business to parts of the world where there is a culture of bribery.