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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 The principles have been slightly renamed and reordered since the draft guidance but remain substantially the same.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.

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The content on this page 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.

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