On 1 July 2011, the much anticipated Bribery Act 2010 (the Act) will come into force. The Act will impact on all commercial organisations, to a greater or lesser degree, and so, if you haven’t already turned your mind to what it means for your organisation, now is the time.
A detailed explanation of the main offences under the new Act can be found in our legal update at: www.fladgate.com/BriberyAct2010.
Three of the key offences under the Act will by now be familiar to most people and are largely restatements of existing law:
A fundamental difference however is that, under the Act, these offences will apply not only to the public sector, but also in private sector business to business arrangements.
The fourth key offence under the Act is the wholly new corporate offence of failing to prevent bribery. This offence may be committed by any body or partnership incorporated or formed in the UK, irrespective of where it carries on business, or by any body or partnership carrying on any part of its business in the UK, wherever it is incorporated (a relevant commercial organisation).
A relevant commercial organisation will be guilty of an offence if a person associated with it bribes another person, intending to obtain or retain business, or to obtain or retain an advantage in the conduct of business, for the organisation. An associated person is very widely defined by the Act and may, for example, include employees, agents, subsidiaries, joint venture partners and suppliers. An organisation may incur liability as a result of the actions of a wide variety of people, for which it would not ordinarily assume itself to be responsible.
The only defence available to a relevant commercial organisation is if it has adequate procedures in place designed to prevent persons associated with it from committing acts of bribery on its behalf. The Ministry of Justice has published statutory guidance on what might constitute adequate procedures; organisations should consider by reference to this guidance whether they have done enough to protect themselves.
For further information on this guidance, please see our legal update at: www.fladgate.com/BriberyAct2010_Guidance.
So, as you consider whether your organisation is prepared for the Act, ask yourself these questions:
Implementing anti-bribery procedures is not only important in terms of protecting your organisation from liability. It is increasingly likely that questions about compliance will form part of contractual tender processes and you are likely to get requests from other organisations to supply details of your policies and procedures. Taking the time to get this in place at the outset will not only mitigate the legal risks to which your organisation is exposed, but may also allow you to stand out from your competitors.