31-10-2011 15:26

The Bribery Act 2010 (“the Act”) largely came into force on 1 July 2011 and creates a consolidated set of bribery offences under UK law.  Crucially for commercial organisations there is a new offence of failing to prevent bribery.

 Broadly under the Act, there are four categories of offences:

  1. Paying Bribes
  2. Receiving Bribes
  3. Bribing Foreign Public Officials
  4. Failure of commercial organisations to prevent bribery

Failure of a commercial organisation to prevent bribery is the new offence created by the Act.  A commercial organisation will commit this offence if a person associated with the commercial organisation bribes another person with the intention of obtaining or retaining business or an advantage in the conduct of business for the commercial organisation.  A company convicted of this offence can face an unlimited fine.

It is important to note that “a person associated” with the commercial organisation could include employees, agents and external third parties.  It is therefore possible that the commercial organisation could be guilty of the offence even if no-one at the commercial organisation knew about the bribe. 

The commercial organisation will have a defence if it can show that it had “adequate procedures” in place to prevent bribery.  Therefore the burden is on the commercial organisation to show that it has adequate procedures and policies in place.  Guidance on what constitutes “adequate procedures” was published on 30 March 2011 by the Ministry of Justice and commercial organisations should consider in detail their procedures in light of the guidance.

It is also important to be aware that this offence applies to any commercial organisation which carries on business in the UK; it does not need to be incorporated in the UK.  Additionally, the bribe can take place anywhere in the world for the offence to bite on the commercial organisation. 

It will therefore be important for commercial organisations to be aware of this new offence and ensure that it has sufficient robust policies in place and to ensure that all people “associated” with the commercial organisation are aware of the policies.

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