article
Corruption crackdown
23 April 2010
British companies will soon face some of the toughest corruption
laws in the world after Parliament heeded international criticism
and passed the Bribery Act 2010.
The Act, which is expected to come into force later this year,
could mean individuals facing the prospect of long prison sentences
and companies facing the prospect of unlimited fines. Corporates
convicted of failing to prevent bribery may also be debarred from
participating in public contracts.
The new Act comes in a year in which we have already seen a
number of high profile cases involving corporates and their
employees as the Serious Fraud Office (SFO) gets tough on corporate
corruption. In March of this year, the SFO arrested three UK board
members of Alstom, the French engineering group, on suspicion of
bribery and corruption. A month earlier, the SFO and the US
Department of Justice agreed multi-million pound settlements with
BAE Systems plc following allegations that the company paid bribes
to win contracts from several nations in Africa and Eastern
Europe.
Under the new Bribery Act there are four key offences:
- Bribing another person
- Accepting a bribe
- Bribing a foreign public official
- Failing to prevent bribery (in the case of a corporate)
The new corporate offence of failing to prevent bribery is a
strict liability offence. The only defence is for the company to
show that it has adequate procedures in place to prevent bribery
(see below for possible measures to consider).
It is important to note that the Act can apply to acts and
omissions that take place in the UK and overseas and, unlike the US
Foreign Corrupt Practices Act, “facilitation” or “grease” payments
are not exempt from the scope of the Act. There is no “de minimis”
level and even a small payment to a foreign official to “expedite”
customs requirements could be caught (unless the payment is a legal
requirement).
There is no set list of actions that a business should take and
appropriate measures will depend upon factors such as business
size, the countries and sectors in which the business operates and
the third parties that it deals with. For some businesses, the
risks may be relatively low and, accordingly, the procedures that
they need to put in place may not be onerous. However the following
steps should be considered:
Review and put in place clear policies and procedures to deal
with bribery and corruption.
If the business has anti-bribery policies and procedures in
place that reflect the position under U.S. law then these may need
to be amended. Unlike U.S. law, facilitation payments, for example,
are not permitted under the new Act.
Staff training and guidance, particularly on difficult areas
such as facilitation payments, commissions, gifts and
hospitality.
Appoint a senior officer to take responsibility for
compliance.
Put in place monitoring processes and internal controls,
including auditing compliance with the law.
Establish procedures for the appointment of third parties such
as agents.
This article was first published by
at www.newbusiness.co.uk
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