The Bribery Act’s Fourth Birthday
A little over four years ago, the Bribery Act 2010 came in to force. Kenneth Clarke, the then Secretary of State for Justice stated the act would tackle the 'scourge of bribery, which blights lives'. The Act was considered necessary as the UK's existing laws were deemed to be inadequate and said to reflect poorly upon UK PLC. At the time, most commercial entities would have put in place policies to comply with this radical revision to anti-corruption law, but many may not have continued to refine and review these, ensuring they meet the businesses' needs.
Four years is a long time in business, so our experts have provided a quick refresher on what the Act means for you and your business.
What is a bribe?
A bribe is defined as a 'financial or other advantage'. This includes cash, cash equivalent, gifts, hospitality, and promises of future work or preferential treatment. Although corporate hospitality doesn't automatically amount to a bribe, when the line gets crossed can be unclear.
To address the 'scourge', the Act created four criminal offences, three of which could be committed by an individual and one for which a commercial organisation could be liable:
1. Bribing another person
2. Requesting, agreeing to receive or accepting a bribe
3. Bribing a foreign public official
4. Failing to prevent bribery - which can only be committed by a commercial organisation - the corporate offence
The first three offences can be committed by individuals and companies. If it is alleged a commercial organisation has committed offences 1 - 3, its senior officers could be prosecuted. This would include directors, company secretaries and managers.
The corporate offence
It is this offence that should most concern commercial entities. Companies will be guilty of an offence if a person associated with it (an employee, consultant, agent, subsidiary company) bribes another person. This bribe must be intended to obtain or keep business, or obtain a business advantage, for the company. Importantly, the offence can take in the UK or overseas.
There is a defence to corporate offence, namely that the company had adequate procedures in place designed to prevent bribery.
The Ministry of Justice has provided guidance on procedures commercial organisations could put in place. This guidance isn't prescriptive, but the more policies, procedures and active monitoring a company puts in place to tackle bribery, the more likely it is that this defence will succeed.
What are the penalties?
The penalties are severe. Individuals may be subjected to unlimited fines and / or up to ten years imprisonment. The company itself may be subject to an unlimited fine. In addition, directors could be disqualified from acting as directors and civil proceedings could be launched to recover any proceeds of crime, arising from the illegal bribe.
How can we help?
Businesses must ensure they have sufficient procedures and policies in place - likely backed by training - to ensure they can defend an allegation that the company has failed to prevent bribery. Not only are the penalties severe, the wider reputational damage of a finding that a business has engaged in bribery could be catastrophic.
Our multi-disciplinary team of commercial, regulatory and employment lawyers provide a full-service to both UK and international companies on compliance and best-practice.
We can develop a suite of policies, procedures and training materials, tailored to your business, to ensure you comply with this challenging legislation. We can also undertake yearly audits, to ensure your business is as protected as possible.