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Bribery Act 2010 in force from today 1 July 2011

Posted on 1st July 2011
New legislation

The Bribery Act 2010 comes into force today. It applies to all organisations regardless of size, business type or sector. The Act updates and expands the UK anti-corruption law.

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Simon Quantrill Simon
Managing Partner Telephone: 01473 688100

business managers and employers need to make sure their transactions comply with the new rules

The Act has been widely criticised as (potentially) putting a stop to corporate hospitality and harming the ability of UK business to compete across the world. Criminal liability exists for individuals and organisations who act in breach of the new offences including prison and fines. Business managers and employers need to make sure their business transactions comply with the new rules and that their employees understand how to conduct transactions correctly and avoid being accused of bribery.

What is bribery?

A bribe is defined as "a financial or other advantage" offered, promised or given to induce a person to perform a relevant function or activity improperly, or to reward them for doing so (section 1 Bribery Act 2010). This definition includes most types of possible advantage including gifts, hospitality and entertainment, political or charitable donations, sponsorship and publicity.

What are the offences under the Bribery Act 2010?

There are four new criminal offences:

  • Offering, promising or giving a bribe to another person (section 1)
  • Requesting, agreeing to or accepting a bribe (section 2)
  • Bribing a foreign public official to obtain or retain business (section 4)
  • A new strict liability offence for a commercial organisation which fails to prevent bribery by those acting on their behalf for its benefit (section 7).
The Act is not retrospective.

Bribery examples:

Offering a bribe

An employee offers a potential client tickets to a Wimbledon finals match, but only if they agree to do business with their company.

This would be an offence under section 1 because the employee is making the offer to gain a commercial and contractual advantage. The company may also have committed an offence because the offer was made to obtain business for it (section 7). It may also be an offence for the potential client to accept the offer! (section 2).

Receiving a bribe

A supplier gives the Finance Director's son a job, but makes it clear that in return they expect the director to use her influence at work to ensure the supplier continues to do business with the director's employer.

It is now an offence for the supplier to make such an offer. It is also an offence for the director to accept the offer as she would be doing so to gain a personal advantage (i.e employment for her son).

Bribing a foreign official

A company arranges to pay an additional payment to a foreign official to speed up an administrative process, for example clearance through customs.

The offence of bribing a foreign public official is committed as soon as the offer is made because it is made to gain a business advantage for the company.

Is there a defence for employers?

Under section 7, a failure to prevent bribery, is a strict liability offence. This means there is no need for the prosecution to prove negligence or the guilt of the "directing mind and will" of the organisation. This makes the offence easier to prove and it is likely it will lead to more corporate prosecutions and convictions.

There is a defence, however. When an employee (or other "associated person" such as a consultant or commercial agent) commits a bribery offence, under section 7(2) of the Act, an employer has a defence if it can show that it had in place "adequate procedures" designed to prevent bribery. There is no definition of what is meant by adequate procedures but the Ministry of Justice has published guidance on what adequate procedures might involve. The guidance sets out six guiding principles for organisations to follow:

  • Proportionate procedures - take proportionate steps to reflect the risks faced and size of the organisation
  • Top level commitment - senior managers must lead the way
  • Risk assessment - consider the risks of bribery in your organisation
  • Due diligence - investigate and check you know whom you are doing business with
  • Communication - ensure your staff and those working for your organisation know and understand their responsibilities
  • Monitoring and review - things change and you should ensure you monitor and review your policies and procedures to ensure they remain effective.
The guidance acknowledges that there is no "one size fits all" approach. Procedures and rules that a small business or charity may put in place are likely to be less detailed compared to a large commercial company trading in Europe and throughout the world.

What are the key risk areas for employers?

All employers need to make sure they conduct risk assessments for the following areas:

  • Recruitment
  • Expenses
  • Gifts and hospitality
  • Disciplinary procedures
  • Contractual requirements
  • Bonus and commission schemes
  • Whistleblowing policies
  • Investigation of bribery allegations or concerns
When it comes to gifts and hospitality, despite far too much misleading media hype giving and receiving genuine and reasonable corporate gifts and hospitality should not amount to a bribery offence - the Government has stated that it does not intend that reasonable and proportionate hospitality will be caught by the Act - the only difficulty is that the Act is actually silent on this subject!

Once employers are clear about the risks which they face, they should introduce appropriate rules, policies and procedures.

Relevant staff should be trained and steps taken to monitor and review the effectiveness of the policies and procedures.

How can Quantrills help you?

If you would like advice and guidance on conducting your risk assessment to make sure you have in place "adequate procedures" please contact Simon Quantrill.

Special offer | Anti-corruption and bribery policy

We can provide you with a draft anti-corruption and bribery policy for a fixed-fee of £75 + VAT. It is supplied in Word format. Interested? Please email Simon Quantrill.

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