The Bribery Act comes into effect
The Bribery Act 2010 came into force on 1 July, creating the new offences of offering or receiving a bribe, bribery of foreign public officials, and failing to prevent a bribe being paid on an organisation’s behalf.
This is likely to cause the most problems, because it makes an organisation liable for bribes made by people associated with it, even if the organisation was unaware of their behaviour. The wide ranging definition of ‘associated persons’ includes employees, agents, subsidiaries and contractors. To be an offence, the aim of the bribe must be to influence the recipient in their official role to secure a sale or a business advantage.
Fortunately, these procedures need only be proportionate to the organisation’s size and nature. A very small organisation may be able to rely on oral briefings, but larger bodies may need extensive written communications. However, size is not the only determining factor and some smaller organisations may face significant risks. The Ministry of Justice guidance to the Act makes it clear that reasonable hospitality to meet, network and improve relationships with customers is a normal part of business; it is not the intention of the Act to make corporate hospitality a crime.
What can you do to avoid falling foul of the Act? The first step is a risk assessment across your organisation. Next, consider what changes are required to your policies and procedures. It might mean inserting specific conditions prohibiting bribery in the terms of engagement for associated persons, especially those involved in countries with a reputation for corruption. Staff training is essential. It should be made clear that any suspicion of bribery must be reported.
Then you should review your organisation’s hospitality policies to ensure that there are strict guidelines on the level of hospitality that can be offered and accepted. The policies should be regularly monitored and top-level management needs to be involved in both formulation and review.
The guidance also recognises that it will take time to apply new procedures retrospectively to existing associated persons. Penalties are severe and include up to ten years’ imprisonment and unlimited fines.
Organisations that operate solely within the UK should not have too many problems complying with the Act, but organisations that trade overseas may well find that behaviour that may be considered perfectly acceptable elsewhere has now become criminalised.