After a period of consultation, some delays and much speculation, the government has finally published guidance on procedures which commercial organisations can put in place to prevent their associates from committing bribery. The Bribery Act will therefore come into force on 1 July 2011.
As a reminder, the Act introduces a new corporate offence of failing to prevent bribery. This is a strict liability offence where a person ‘associated’ with the organisation (which can include consultants and agents) makes a bribe. The organisation has a defence if it can prove it has ‘adequate procedures’ in place even if bribery has occurred.
The full guidance can be downloaded from the Ministry of Justice website. Businesses hoping for a checklist–style guidance will be disappointed. Instead the guidance is based on six principles:
- Proportionality – to the size of the business and the risks it faces
- Top Level Commitment – management must play an active part
- Risk Assessment – in the context of the business and its markets
- Due Diligence – knowing who the business is dealing with
- Communication – with staff and others who do work for the business
- Monitoring and Review – as risks may change over time
Corporate partner at Dutton Gregory, Jonathan Brown, said "The key principle is that of proportionality. The government stresses that the approach is based on common sense and the Act must be workable, especially for smaller organisations. There is a commentary on each principle, and eleven case studies which are not part of the guidance but which are intended to complement it and illustrate how the principles may be applied. A separate ‘Quick Start Guide’ has also been published to the things organisations need to know to prepare for implementation of the Act.
One area which attracted much comment from worried businesses related to corporate hospitality. The guidance states that bona fide, reasonable and proportionate hospitality is not intended to be outlawed. For businesses operating abroad, the guidance makes clear that so-called facilitation payments (“small bribes made to facilitate routine Government action”) were prohibited under the old law and remain so".
Implementation of the Bribery Act is less than three months away. If they have not already done so, organisations must now take a look at their business and put in place (or if necessary) revise their plans in the light of the new guidance.
Jonathan can be contacted at Dutton Gregory LLP, Solicitors on 023 8021 3797.
