Are you ready for the Bribery Act 2010?

Added On: 22nd September 2010

Are you ready for the Bribery Act 2010?

The Bribery Act 2010 will come into force in the UK in April 2011. Prior to the Act the law relating to bribery was contained in a number of different pieces of legislation, which caused quite a degree of confusion. This Act now brings all the legislation together into one place. The information below gives an overview of the Act and shouldn’t be taken as comprehensive advice.

For the purposes of this Act bribery is defined as the giving or taking of a reward in return for acting dishonestly and/or in breach of the law. Under the Bribery Act 2010 there are four possible offences.

Bribing another person

Offering, promising or giving of a reward to induce a person to perform a relevant function or activity improperly.

Being bribed

Accepting of, agreeing to accept or requesting of a reward in return for performing a relevant function or activity improperly. A ‘relevant function or activity’ includes any activity of a public nature or any activity connected to a business. ‘Acting improperly’ will be any breach of what a reasonable person in the UK would expect in relation to the performing of the function or activity.

Bribing a foreign public official

This is a specific offence of trying to influence a foreign public official with the intention of obtaining or retaining business in a situation where the public official was not permitted or required by law to be influenced.

Failure to prevent bribery

This - the 'corporate offence' - occurs when an organisation fails to stop people who are operating on its behalf from being involved in bribery.

It is the ‘corporate offence’ that organisations need to pay particular attention to. This offence could occur as a result of the activities of a range of people working on behalf of the organisation – an employee, consultant or agent, for example – if those individuals were involved in accepting or receiving a bribe which resulted in the organisation gaining or retaining business. This is a change to the current approach to the law where only bribery involving senior managers is likely to result in legal action.

The offence of bribery relevant to this Act could be committed in the UK or overseas. Specifically offences may be prosecuted if:

  • committed by a British national or corporate or individual who is ordinarily resident in the UK regardless of where the offence was committed, and/or

  • any act or omission which forms part of the act is committed in the UK

In addition the corporate criminal offence will apply to commercial organisations with a business presence in the UK regardless of whether or not the bribe is paid in the UK or the procedures are controlled from the UK.

If an offence does occur as a result of the activities of an individual (or individuals), there is a potential defence where the organisation can demonstrate that it had adequate procedures in place to stop any bribery from occurring.

‘Adequate procedures’ aren't defined in any detail in the Act, but guidance from the Government is expected in January 2011. However, even when the guidelines are issued it will be the courts who decide whether an organisation did have ‘adequate procedures’ in place. It is likely that the courts will consider such things as the size and complexity of the organisation in determining what is ‘adequate’ – consequently the requirements on larger organisations are likely to be greater.

Actions to be taken by organisations
It is well worth organisations looking at the following areas and taking any necessary steps to ensure that they have adequate systems in place:

  • Nominated responsibility
All organisations should name a senior manager who will have responsibility for the operation of policies relating to anti-corruption.

  • Anti-corruption policy
All organisations should have an anti-corruption policy that is publicised to all employees.

  • Gifts and hospitality procedures
Organisations should review their gift and hospitality procedures and consider whether the controls that have been put in place are sufficient to prevent bribery from occurring.

  • Contracts of employment
It is recommended that specific mention should be made of corruption and bribery situations as being examples of Gross Misconduct, within disciplinary procedures. A specific clause relevant to bribery and anti-corruption should be included in contracts of employment where appropriate.

  • Risk assessments
Risk assessments of relevant situations where bribery could occur should be carried out. The named senior employee responsible for anti-corruption should review these risk assessments and identify actions that should be taken.

  • Financial controls
It is recommended that a review is undertaken of the levels of signature required for different levels of transaction and that multiple authorisation is required for significant transactions.

  • Training on anti-corruption
Training should be given to all employees who may potentially be involved in situations where bribery could occur. This training should make clear to employees what is and what is not acceptable and how to act if caught in a situation where bribery is attempted.

  • Whistleblowing
Organisations should review their Whistleblowing procedures to ensure that there is specific mention of situations involving corruption and bribery.