Bribery Act 2010
The Bribery Act 2010
This Act came into force on 1 July 2011. It reforms the criminal law of bribery by introducing a new consolidated scheme of offences to cover bribery in the UK and abroad. The offences are:
(1) bribing another person (i.e. offering, promising or giving of an advantage)
(2) requesting, agreeing to receive or accepting a bribe (advantage)
(3) bribery of a foreign public official
(4) failure by a commercial organisation to prevent bribery by persons associated with it.
There is a maximum penalty of 10 years imprisonment (and/or unlimited fine on indictment) for any of the first three offences and an unlimited fine for the fourth offence relating to a commercial organisation. (i.e. an organisation that carries on a business)
The Act provides a defence to commercial organisations if they can show that they had adequate procedures in place to prevent persons associated with them from committing bribery offences.
In accordance with the Act the Secretary of State has published guidance on procedures that relevant commercial organisations can put in place to prevent bribery by persons associated with them.
The Guidance makes it clear that the Act is not expected to lead to a large number of prosecutions and nor does it outlaw corporate hospitality. The procedures to be put in place will depend upon the size and nature of the business involved. Large companies may require extensive written procedures whereas small companies could communicate their anti-bribery policies orally and still meet the requirements of the law.
The Guidance is formulated around six guiding principles:
1. Proportionate procedures dependent upon the bribery risks faced by the organisation.
2. Top- level management commitment to preventing bribery.
3. Risk assessment of the nature and extent of the organisations exposure to potential external and internal risks of bribery on its behalf by persons associated with it.
4. Due diligence procedures related to those who are, or who may become, persons associated with the organisation in order to mitigate identified bribery risks.
5. Communication (including training) throughout the organisation to ensure its bribery prevention policies and procedures are universally understood and implemented.
6. Monitoring and reviewing policies and procedures to prevent bribery and make improvements where necessary.
In regard to corporate hospitality, it would only constitute a bribe if it was intended to induce conduct in the recipient that breached good faith, impartiality or trust.
It is always good practice to have clear policies and procedures in regard to hospitality and promotional expenditure and to limit the nature and extent of both. However, this of itself will not totally prevent bribery which can just as easily involve relatively small amounts as much larger ones.
Where the risk of bribery is high it might well be proportionate to introduce a register of benefits received by persons associated with the organisation from third parties in the course of business.
In circumstances where an employee, agent or other person associated with the organisation negotiates and possibly signs formal contracts on the organisations behalf a clause might be added to relevant contracts along the following lines:
“It is agreed that no incentive, inducement, bribe, gift or favour was offered or accepted in respect of this contract or the negotiations associated with it.”
If the organisation operates in an environment where corruption and bribery is considered a risk then it might be appropriate to include a “whistle- blowers” clause in every contract of employment.
Finally it should be remembered that bribery and corruption have been with us, in varying forms and degrees, for a very long time but they have not been considered an issue in most business organisations and certainly not in those small and medium sized firms that have close knowledge of and trust in their workforce.
All PBS information sheets are designed to provide the detail you need to implement best business and employment practices. They are not a detailed commentary on the current law and where advice is needed in a specific case you should contact PBS for expert consultation.