Bribery is endemic in many parts of the world where British firms do business, but any that succumb to it will soon face fairly horrific penalties
The Bribery Act received royal assent on 8 April. The act replaces the patchwork of previous legislation with, broadly, two general offences: the offering, promising, or giving of an advantage (that is, bribing), and the requesting, agreeing to receive or accepting of an advantage (that is, being bribed). The old, complicated law is replaced with a much more straightforward one based on an intention to induce improper conduct.
The act also creates the offence of bribery of a foreign public official and a corporate offence of failing to prevent bribery.
The general bribery offences will come into effect in June and the corporate offence in October. Before then, firms have to make sure they understand the law and can comply with it.
The new offence of bribery of a foreign public official occurs where a person intends to influence them while they are acting in their official capacity. The offence does not cover the acceptance of bribes, only offering them.
The corporate offence occurs where a person associated with a corporate body commits one or more of the general bribery offences. This offence can be committed either in the UK or overseas. Furthermore, if it can be shown that the corporate offence was committed with the consent or connivance of “senior officers”, then those persons will also be guilty. “Senior officers” covers not only directors and managers but also, for example, company secretaries.
If the company can demonstrate that it has in place “adequate procedures” designed to prevent bribery, this will be a defence to the corporate offence. The issue is: what does that mean? The government has promised that it will provide guidelines three months before section 7 comes into force, so we should expect these in around July of this year. If, however, you are looking for guidance now (and you should be) you can find help from organisations such as Transparency International and the Global Infrastructure Anti-Corruption Centre, both of which have anti-bribery strategies on their websites.
Get ready now: the last thing you want is to be a test case for the legislation
Anyone found guilty of a bribery offence on summary conviction (heard by a magistrates court) may face imprisonment for a maximum of 12 months or a fine up to £5,000. On conviction on indictment, dealt with by the crown court and the more serious offence, the maximum term increases to 10 years and an unlimited fine. The corporate offence carries an unlimited fine. Additionally, those companies working in the public sector on contracts subject to the Public Contracts Regulations 2006 face the prospect of being barred from any further work in that sector.
So be aware that from June there will be rigorous anti-bribery legislation in place, covering public and private sectors here and overseas and including what are euphemistically known as “facilitation payments”, which many consider not to be bribes at all.
All commercial organisations should therefore look to prohibit bribery in any form, whether direct or indirect and by or for the organisation, and put in place systems to counter it. Larger companies’ procedures could perhaps include a code of conduct, detailed policies relating to matters such as gifts, hospitality, facilitation payments, the vetting of outside agents and advisers, and lobbying and political activities.
Companies should conduct regular audits and staff training. Consider including standard clauses in your commercial contracts that replicate and develop the anti-corruption clauses that you can find in public sector contracts. Ensure you carry out due diligence before entering into arrangements with other parties and that appropriate checks are carried out during the processing of payments. Get ready now: the last thing you want is to be a test case for the new legislation.
Simon Lewis is a partner in Dickinson Dees. You can listen to Simon explaining the Bribery Bill on our podcast