Comparative Guides
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Results: 4 Answers
Anti-Corruption & Bribery
4.
Compliance
4.1
Is implementing an anti-corruption compliance programme a regulatory requirement in your jurisdiction?
 
UK
It is not compulsory. However, the only defence for a company accused of failing to prevent bribery under Section 7 of the Bribery Act is that it had ‘adequate procedures’ in place to prevent bribery. See question 4.2.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
4.2
What compliance best practices should a company implement to mitigate the risk of anti-corruption violations?
 
UK
In its advice on the Bribery Act, the Ministry of Justice issued guidance as to what could be considered having adequate procedures in place to prevent bribery.

The six principles the guidance outlined are as follows:

  • Proportionate procedures: A commercial organisation’s procedures to prevent bribery should be proportionate to the bribery risks it faces and reflect the nature, scale and complexity of its activities. They should also be clear, practical, accessible, effectively implemented and enforced.
  • Top-level commitment: A company’s top-level management must be committed to preventing bribery by persons associated with it and should foster a culture in which bribery is never acceptable.
  • Risk assessment: Companies should conduct regular, documented assessments of the nature and extent of their exposure to possible external and internal risks of bribery posed by persons associated with it.
  • Due diligence: A proportionate and risk-based approach should be taken to persons carrying out services for or on behalf of the company. Those persons should make similar checks on those they deal with.
  • Communication and training: The company should ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation. This should be done through internal and external communication and training.
  • Monitoring and review: Procedures designed to prevent bribery should be monitored regularly and altered where necessary.

The important thing is the substance of the procedures and the actual actions undertaken – not the mere fact that the procedures exist. It will be necessary to show there has been training in these procedures and that the relevant parties have access to them. There have been cases where having written procedures has not protected a company against corruption allegations. If a company is operating in an area where the risk of corruption is known to be high, its compliance must reflect this.

Compliance is about training to identify bribery and then reporting it and avoiding it. The reporting element is important as only through reporting can the evolution of methods of bribery be identified.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
4.3
Which books and records requirements have relevance in the anti-corruption context?
 
UK
Records of staff training and conduct will be of value when it comes to preventing corruption in the workplace.

A company’s ability both to maintain and to refer to comprehensive financial records will also be of immense importance in preventing and identifying corruption. Companies face a number of obligations in relation to the keeping of financial records, some of which are detailed below – although this list is not exhaustive:

  • The obligation on companies to keep adequate accounting records is governed by Part 15 of the Companies Act 2006.
  • Specific sectoral rules relating to record keeping and accounting may also apply. The Financial Conduct Authority (FCA) Handbook states that regulated firms must arrange for orderly records to be kept of their business and internal organisation.
  • Under Section 386 of the Companies Act 2006, every company must keep adequate accounting records that show and explain its transactions and financial position.
  • Private companies must keep accounting records for three years and public companies must keep accounting records for six years (Section 388(4) of the Companies Act).
  • The Companies Act states that a company’s annual accounts must be audited unless an exemption applies, such as if it is a small company (Section 475). The auditor must compile a report that includes a statement as to whether, in his or her opinion, the accounts give a true and fair view of the company’s state of affairs (Section 495).
  • An offence is committed by every officer of the company who fails to comply with Section 386 of the Companies Act. It is a defence for such persons to show that they acted honestly and that the default was excusable in the circumstances in which the company’s business was carried out. The maximum punishment for the offence is two years’ imprisonment (Section 387(3)(a) of the Companies Act).
For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
4.4
Are companies obliged to report financial irregularities or actual or potential anti-corruption violations?
 
UK
Any company that suspects financial irregularities or corruption should be looking to conduct an internal investigation. It should either carry this out itself or seek help from those with relevant experience of conducting such investigations. Only by carrying out an internal investigation can a company determine whether there has been wrongdoing and, if so, the likely cause and scale thereof.

There is no legal duty to report financial irregularities or corruption. However, an internal investigation can be of value in helping the company to decide whether there is a matter that needs reporting to the authorities and, if so, how and when to report it. The findings of such an investigation coupled with legal advice from those with expertise in this field can help a company to hold its nerve in its dealings with the authorities and seek the most appropriate outcome, as opposed to meekly accepting its punishment.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 came into force in June 2017 and implemented the EU Fourth Directive on Money Laundering. UK companies covered by the regulations are obliged to report financial irregularities. While this does not directly relate to bribery, money laundering may be carried out as the result of bribery. The EU Fifth Directive on Money Laundering is set to be implemented in 2020.

Companies and directors have duties imposed on them to disclose corrupt activities to auditors, shareholders or regulators by particular legislation or regulations. Companies in the regulated sector and their officers may be required to disclose a violation or allegation of misconduct in accordance with their regulatory obligations.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors
4.5
Does failure to implement an adequate anti-corruption programme constitute a regulatory and/or criminal violation in your jurisdiction?
 
UK
Under UK law, there is no offence of not having an adequate anti-corruption programme in place.

However, having such a programme in place can be of great importance if a company is investigated for a Bribery Act Section 7 offence of failure to prevent bribery, as the only defence to this charge is that the corporate had ‘adequate procedures’ in place to prevent bribery. The Section 7 offence is designed to criminalise failures that result in bribery and corruption.

For more information about this answer please contact: Azizur Rahman from Rahman Ravelli Solicitors