bribery act guidance finally published
31 March 2011
Following much delay and debate, the Ministry of Justice has
published its finalised guidance on the Bribery Act 2010 and the
‘adequate procedures’ defence. Businesses now have three months to
prepare – the Act will come into force on 1 July 2011.
Overall, the finalised guidance is more substantial and useful
than the draft version and should provide commercial organisations
with both a better steer on what they now need to do and some
reassurance that activities such as normal hospitality and
entertainment will not be prohibited by the new law. The guidance
also recognises that very small businesses and UK only businesses
are likely to need to do less than those that are larger or have
overseas operations. However, it is not surprising that it remains
the case that the guidance ultimately leaves it to every
organisation to assess its risks and decide upon the procedures
that it needs to put in place.
The guidance runs to 45 pages and key points to note are:
Six core principles
The guidance remains
centred around six principles which the Government considers will
assist organisations in formulating appropriate procedures. The
principles have been slightly renamed and reordered since the draft
guidance but remain substantially the same. The principles are:
1. proportionate procedures
2. top level commitment
3. risk assessment
4. due diligence
5. communication (including training)
6. monitoring and review
The objective of the Act
The guidance
states that the objective of the Act is not to target well run
organisations that experience isolated incidents of bribery and it
is to be hoped that this is the case. However, this emphasises the
need to be able to point to sensible policies and procedures in the
event that bribery does occur.
Legitimate hospitality
There is
recognition throughout the guidance that bona fide and
proportionate hospitality is a legitimate aspect of carrying on
business. The foreword by Ken Clarke states, “Rest assured – no
one wants to stop firms getting to know their clients by taking
them to events like Wimbledon or the Grand Prix.” In the
context of the offence of bribing a foreign public official, it is
also recognised that different standards or levels of hospitality
may apply in different sectors and that hospitality such as fine
dining and tickets to a sports match in the context of an overseas
trip are unlikely to raise the inference of an intention to
influence decision making.
Policies on gifts and hospitality
However,
the guidance does suggest strongly that organisations will want to
review their policies on gifts and hospitality and set out
appropriate standards. As such, some considered thought by
organisations in relation to their types and levels of gifts and
hospitality remains very important.
Facilitation payments
Facilitation
payments continue to be illegal. It is acknowledged that the global
eradication of all such payments is difficult and prosecutorial
discretion may be appropriate where such payments occur. However,
it is clear that organisations must put in place appropriate
policies and procedures to prevent such payments. In the absence of
any procedures, it will be extremely difficult to use the ‘adequate
procedures’ defence!
Top level commitment
Top level commitment
is clearly essential to all policies and procedures that are put in
place.
Communication
Whatever policies and
procedures are put in place, it is essential that these are
communicated to employees and other persons associated with the
organisation and that there is the ability for people to raise
concerns, e.g. a whistle blowing mechanism.
To discuss what, and how much, your organisation needs to do in
the light of the finalised guidance, please get in touch with our
team.
The content of this bulletin is provided for the purposes of
general interest and information. It contains only brief summaries
of aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.