The Bribery Act 2010 – the latest
In our February ebulletin, we reported that the Bribery Act 2010 was due to come into force on 6 April 2011, but had been delayed. It will now come into force on 1 July 2011, with guidance notes and a quick start guide to assist employers understand their obligations.
Announcing the guidance for the new law, Justice Secretary Kenneth Clarke said that the emphasis on common sense was down to the Government “listening carefully to businesses”. He hoped that the guidance “shows that combating the risks of bribery is largely about common sense, not burdensome procedures” which was “particularly important for small firms that have limited resources” and “should save some organisations of all sizes from the fears sometimes aroused by the compliance industry that millions of pounds must be spent on new systems, which no honest business will require”.
One view of the guidance is that there will be a sigh of relief amongst the corporate world as it had been suggested that even the most frugal of hospitality could have been interpreted as a bribe, with a cheer from small businesses that they can avoid implementing unnecessary controls with resultant costs, if they do not foresee a risk of bribery in their company.
However, Transparency International UK, the UK’s anti-corruption watchdog has criticised the guidance saying that it “undermines the key features of the act and will limit its effectiveness”. They suggest that the publication strongly indicates that the Government has surrendered to last minute lobbying by some business groups opening up loopholes that could allow dishonest companies to continue paying bribes. An area of serious concern is the exemption of foreign companies listed on the London Stock Exchange. Transparency International UK feel that it is unacceptable that changes made to the draft guidance since late last year, which are now enshrined in the published version depart from international good practice in several areas.
The Bribery Act will abolish all existing UK anti-bribery laws and replace them with a number of new offences which are markedly very different from anything we have had in this country before. It has, however, been criticised for placing too much of a burden on businesses as they can face prosecution for failing to prevent bribery by their employees or any associated parties. It remains to be seen whether the Government’s review changes any of this.
As it stands, the Act will make it significantly easier for UK enforcement agencies to achieve convictions for bribery offences, and the Serious Fraud Office have made it clear that they will come down very heavily on individuals and organisations who have not taken action to establish an anti-corruption culture or who use corruption to gain business advantage.
The Act makes it an offence not only to bribe another, but also to be bribed. The bribery may take any form and is referred to as “financial or other advantage”. It need not be direct, but it will be considered sufficient if the bribe is provided to a third party, eg, a family member of the person who is influenced.
An offence of this nature is not limited to the actual giving or receiving of a bribe, the Act may also be breached via an offer, promise, request or agreement to receive a bribe. The wide drafting of the Act has caused much concern as it has the potential to criminalise conduct that was not previously considered as criminal, eg, corporate hospitality, so it will be crucial for employers to have a clear and easily accessible written policy on the offering and acceptance of gifts and hospitality.
However, the guidance to the Act suggests that corporate hospitality will only fall foul of the legislation if it is designed to influence the recipient to act improperly. Most routine hospitality would be unlikely to breach the Act, but over lavish or disproportionate hospitality may. We are able to provide guidance on this and draft policies for employers to deal with the offering and acceptance of gifts and hospitality.
A person who bribes a foreign public official (and this can be a person occupying a legislative, administrative or judicial position, in addition to representatives of public international organisations) is guilty of an offence, if they intend to obtain or retain business or a business advantage by influencing an official acting in that capacity. This is likely to be an issue for businesses who trade in parts of the world where bribes or kickbacks can be expected.
Where a company or partnership is found to be committing any of the bribery offences, a senior officer (and this may be a director, secretary, manager, partner or someone purporting to act in that capacity) may find themselves liable if they consented in the commission of that offence. So even if they did not make the bribe themselves but turned a blind eye, they may be liable.
Commercial organisations will commit an offence if a person associated with it (ie, any person who performs services for the organisation, including employees, agents, subsidiaries, and entities which the organisation has no control or ownership over) bribes another, whether in the UK or overseas, intending to obtain or retain business or a business advantage for that organisation. This is a wholly new offence and applies to all commercial organisations, both corporations and partnerships, incorporated or formed, that carry on business or part of a business in the UK. The only defence to this strict liability offence is if the organisation can establish that they have adequate procedures in place to prevent the occurrence of bribery of this kind.
Any offence under the Act committed by an individual is punishable by either imprisonment for a maximum of 10 years and/or an unlimited fine. Corporate entities that are guilty of a bribery offence or a corporate offence will be liable to an unlimited fine if they are convicted on indictment.
We recommend that it makes good sense to have appropriate anti-corruption procedures ready for 1 July 2011. If you would like any assistance with drafting suitable procedures, please let us know. We will of course keep you informed of any news about when the Act will become law.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]eemploymentlaw.co.uk).