The UK Bribery Act 2010 (Act) came into force on 1 July
2011 and any Australian companies with links to the UK should be
ready for the impact.
There are four bribery offences under the UK Bribery Act
2010 (Act) which are bribing, being bribed, bribing a foreign
official and a new corporate offence which is the failure by a
corporate organisation to prevent bribery.
What is a corporate organisation? An Australian company or
partnership which "carries on a business or part of a
business" in the UK will fall within the definition. But what
does this mean? Well, the guidance to the Act states that a common
sense approach is taken to determine this and a company must have a
demonstrable business presence which apparently means more
than a listing on a stock exchange and more than owning a UK
subsidiary. Yes, ambiguous! But, as cases start rolling in, the
courts will decide what this actually means, so for the time being
any business with operations, links or activities in the UK should
assume the Act applies. The Serious Fraud Office has made it clear
that foreign companies will be prosecuted where appropriate.
A corporate organisation will be guilty of failing to prevent
bribery (the penalty is an unlimited fine) if a person
associated with the company commits one of the bribery
offences with the intention to obtain or retain business, or a
business advantage, for the company. An "associated
person" is someone (not just a UK citizen) performing services
for or on behalf of the company anywhere in the world, which may
include agents, employees and subsidiaries and even suppliers and
Basically, if your Australian company is a "corporate
organisation", it will commit a bribery offence under the Act
if an agent commits a bribery offence in Africa, even if the
company was totally unaware of it. Pretty far reaching stuff!
What can you do about this? There is a defence if you can prove
that you had adequate procedures in place to prevent the
The guidance to the Act sets out 6 principles forestablishing
procedures proportionate to the risks faced must be
the board must be committed to preventing bribery;
a risk assessment must be undertaken to assess the nature and
extent of exposure to bribery;
due diligence must be undertaken to ensure you know who you are
bribery polices must be communicated and understood by
associated persons; and
monitoring and review of procedures.
More detail required or got any questions? Just ask.
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