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 contractors.

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 bribery.

The guidance to the Act sets out 6 principles forestablishing adequate procedures:

  • procedures proportionate to the risks faced must be implemented;
  • 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 working with;
  • 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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