I’ve heard that there is a new law coming into force soon regarding bribery. I run a large company and we often have to tender competitively for commercial contracts, sometimes with governments abroad. What do I need to be aware of?
On 1 July 2011, the Bribery Act 2010 comes into force, creating four new bribery offences: offering a bribe; receiving a bribe; bribery of a foreign public official; and failing to prevent bribery. Maximum prison sentences of 10 years are only part of the story. Confiscation proceedings will see companies treated in the same way as drug dealers with all proceeds stemming from the criminal bribe forfeited. With millions of pounds potentially at stake, you are right to want to know more.
Justice Secretary Ken Clarke has said that proportionality is key: although all businesses must consider bribery, if the business is small and bribery unlikely then they need do comparatively little. However, the bigger the company, the greater the need to assess the risk of bribery within the company and those associated with it – both in the UK and abroad. If a bribe were to happen, the company would be expected to show it had adequate “bribery prevention measures” in place. If it fails to do so, the company and its senior officers might find themselves in the dock of a Crown Court.
The fact that your company is large and competes for commercial contracts means that there is the potential for bribery. The Act punishes those who bribe as well as those who turn a blind eye. It also covers people other than employees who are associated with the company and for whose actions the company can be held liable. The Ministry of Justice has published guidance on the Act outlining the steps a company must take in order to demonstrate that the briber acted contrary to the expectations of the company.
There are six principles that a company such as yours would be expected to have at the heart of its thinking. Firstly, you must consider proportionality. Put simply, the greater the risk of bribery, the more a company must do to stop it. The bribery prevention policies must be clear and, as a boss, you will have to demonstrate the second principle of “top-level commitment” or zero-tolerance of bribery. You have to communicate this to staff, customers, suppliers and anyone associated with your company, and will need to appoint a senior officer to have responsibility for bribery prevention.
Regular risk-assessment forms the third principle, and you will need to address this now to be ready for July. The risks extend to countries and persons abroad with whom you trade and knowledge of local laws can be required. Due diligence, the fourth principle, means a thorough examination of those acting on your behalf or your trading partners, and the fifth principle requires you to communicate these measures. Employees need to be trained and it is likely that the employment contract will refer to bribery in the context of gross misconduct. The last principle requires you to review all of the above regularly!
The nature of your business means that you have much to consider, but you may be relieved to hear that reasonable corporate hospitality is still permitted. However, although much of the law is common sense, it may be that you will have to forgo centre-court tickets in order to be ready for July and avoiding the attention of my learned friends in another court altogether.
Nicholas Walker, barrister, Exchange Chambers
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