Bribery Act 2010
IS YOUR ORGANISATION PREPARED FOR THE GOVERNMENT'S ZERO TOLERANCE ON BRIBERY?
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Bribery Act 2010 - Update from the Ministry of Justice
On 30th March 2011 the government finally published the guidance that sets out measures businesses can put in place to prevent bribery. The Justice Secretary, Kenneth Clarke announced that the Bribery Act 2010 would come into force on 1st July 2011 allowing businesses 3 months preparation time.
What we can do to help
Assess what bribery prevention measures are appropriate for your organisation and assist in their implementation.
Provide Online Training for staff at all levels explaining the Act in plain English with practical examples.
Provide access to a Whistle Blowing web site to allow anyone in or working with your organisation to raise concerns about integrity without fear of recrimination.
The Bribery Act 2010 enhances and simplifies existing legislation and its implications are wider than those of the Foreign and Corrupt Practices Act 1977 (FCPA). The Act will have a major impact on UK Companies and organisations in all sectors regardless of their size as well as foreign companies operating in the UK.
A NEW CORPORATE OFFENCE OF "FAILING TO PREVENT" BRIBERY
MAXIMUM PENALTY FOR BRIBERY INCREASED TO 10 YEARS IMPRISONMENT
What is Bribery?
Broadly, the Act defines bribery as giving or receiving a financial or other advantage in connection with the "improper performance" of a position of trust, or a function that is expected to be performed impartially or in good faith.
The offence of bribery does not mean money has to exchange hands it can be as simple as a case of Scotch in return for an unfair advantage.
The Act
The act creates four statutory offences:
- Section 1 - A general offence of offering, promising or giving a bribe.
- Section 2 - A general offence of requesting, agreeing to receive or accepting a bribe.
- Section 3 - Bribery of a foreign public official
- Section 7 - A corporate offence of "failing to prevent" bribery.
How will the Act affect your organisation?
Wide Ranging Implications & Corporate Responsibility
Sections 1,2 & 6 apply to offences committed in the UK and to offences committed abroad by a person with a close connection (UK National / Ordinarily Resident) to the UK or a body incorporated or formed in the UK.
The biggest impact of this new Act is likely to be Section 7, "failure of a relevant commercial organisation to prevent bribery". "Relevant commercial organisations" are defined as a body or partnership incorporated or formed in the UK irrespective of where it carries on business or an incorporated body or partnership which carries on a business or part of a business in the UK. Failure to prevent bribery applies to failing to prevent conduct that would amount to an offence under section 1 or 6. It does not matter where in the world the offence takes place and the requirement of a "close connection" does NOT apply to this section. This means an organisation can be charged with failing to prevent bribery by a person working on the behalf of its business (regardless of where they are located). This does not only apply to an employee but to agents, partners, subsidiaries, and contractors etc. working on the organisation's behalf. This offence carries a maximum penalty of an unlimited fine. The section 7 offence is in addition to any liability which might arise under sections 1 or 6.
TO AVOID A CONVICTION AN ORGANISATION WILL NEED TO DEMONSTRATE THAT IT HAS ADEQUATE PROCEDURES IN PLACE TO PREVENT BRIBERY.
The likely level of fines that will be imposed under this section is not known. However fines imposed by for regulatory offences such as the FCPA are massive; therefore failure to prepare for this new Act could be have a serious detrimental affect on your organisation.
Will your Organisation be at risk of prosecution?
The Act applies to all businesses no matter what size therefore no one should consider their Company too small to escape scrutiny.
However you are at greater risk if:
- You use 3rd parties such as contractors, sub-contractors, consultants, distributors and agents.
- You have interactions with Governments (local, national or international).
- You carry out business with high risk countries.
Clearly any Company that is involved in Imports or Exports will be high risk.
What procedures does your organisation need to have in place?
The preventative procedures required by individual organisations will vary greatly depending on the size and nature of their business activities. The Ministry of Justice has published guidance as to the bribery prevention procedures. The guidance sets out six broad management principles to help relevant organisations decide what they can do in order to demonstrate they have adequate bribery prevention procedures in place to form a defence to prosecution. They have also published a 'quick start' guide aimed at SME's. The principles are detailed under the following headings:
Principle 1 - Proportionate Procedures: A commercial organisation's procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the commercial organisation's activities. They are also clear, practical, accessible, effectively implemented and enforced.
Principle 2 - Top-level commitment: The top level management of a commercial organisation (be it a board of directors, the owners or any other equivalent body or person) are committed to preventing bribery by persons associated with it. They foster a culture within the organisation in which bribery is never acceptable.
Principle 3 - Risk Assessment: The commercial organisation assesses the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment is periodic, informed and documented.
Principle 4 - Due Diligence: The commercial organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation in order to mitigate identified bribery risks.
Principle 5 - Communication (including training): The commercial organisation seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces.
Principle 6 - Monitoring and review: The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.
The full guidance can be downloaded below.
Mitigating the risk & how PC Investigations Limited can help?
PC Investigations Ltd will provide a free no-obligation consultation to assess what bribery prevention measures may be appropriate for your organisation. If engaged we can then assist in the implementation of these procedures.
Examples of some of the sevices we can offer are below:
Risk Assessment
Almost all organisations will need to undertake a thorough risk assessment in order to identify the relevant risks and any associated deficiencies. We can carry out the risk assessment or assist your in-house team.
Owner and Employee's knowledge / training
Do all relevant personnel have sufficient understanding of the associated risks of bribery & corruption in relation to your business activities? In addition to any specific training requirements identified we will be offering Online Bribery Act 2010 Training Modules. The training has been developed in consultation with Fairweather Stephen & Co Solicitors. The basic package is aimed at providing all staff with a basic knowledge of the Bribery Act 2010 and how it may affect them. The advanced package is designed for senior managers and above or those working in areas of higher risk. Each course culminates in an assessment with results & certificates provided.
Please visit www.thebriberyact2010.co.uk to find out more.
Due Diligence
Know your trading partners. We can carry out or arrange for due diligence on your trading partners.
Top Level Commitment
We can help you draw up and disseminate a statement of your organisation's commitment to a zero tolerance against bribery and the consequences for involvement in such practices.
Policies and Procedures
Does your organisation have robust bribery prevention policies and procedures that are embedded and understood? For example, conflict of interest, gifts, business entertainment & travel, compensation and whistle blowing. We can help you develop these and ensure they are in an auditable format and properly communicated and advertised to all relevant parts of your organisation. In addition we can provide access to our Whistle Blowing Website for your organisation whereby any of your employees, business partners or clients can raise concerns over integrity issues.
Click here for more information on our Whistle Blowing site and how it works.
Useful Links
Bribery Act 2010
Bribery Act 2010 - Guidance
Bribery Act 2010 - Quick start guide
There are many more implications that many organisations will need to understand. The content on this page is not, nor should it be construed to be, legal advice.