Jersey: The Bribery Act 2010: Practical Guidance For Jersey Companies

Last Updated: 26 October 2016
Article by Raulin Amy, Christopher Byrne, Simon Dinning, Sara Johns and Nathan Powell

Most Read Contributor in Jersey, October 2017

The Bribery Act 2010 (the "Act") came into force on 1 July 2011. Whilst the Act is UK legislation which is not directly applicable to Jersey, its far reaching provisions mean that it does impact on Jersey based companies and individuals with connections to the UK. It is therefore important that Jersey based companies and their officers are aware of the impact of the Act, the offences under the Act and how to protect themselves.

This briefing is designed to answer some key questions that may be asked.

Q: What are the offences under the Act?

A: There are four main offences under the Bribery Act which are:

  • Bribing another person. Accepting a bribe.
  • Bribery of a foreign official.
  • Failure of commercial organisations to prevent bribery.

Please also be aware that Jersey has its own Corruption (Jersey) Law 2006 which came into force in March 2007. This law is similar to the Act in many ways and creates offences in relation to corruption concerning public bodies, public officials and corrupt transactions with agents.

Q: I am a director of a Jersey company. Can I be personally liable under the Act for acts of bribery committed by my company?

A: Liability of Senior Officers (including directors) under the Act is restricted to offences where the company has committed active or passive bribery, or where it has bribed a foreign public official, and where the Senior Officer has consented to or connived in the bribery.

If the offence (or a part of it) took place in the UK, a Senior Officer of a Jersey company could be prosecuted under the Act.

If the offence did not take place in the UK then the senior Officer could not be prosecuted under the Act as Jersey

companies do not commit UK offences of active bribery, passive bribery or bribery of a foreign public official if the bribery occurs outside the UK.

(Senior Officer liability does not extend to the "failure to prevent bribery" offence, which is the corporate offence most likely to be committed by a Jersey company).

Q: We are a Jersey company, or have a subsidiary which is a Jersey company. Could the Act apply to us?

A: The Act makes it an offence for relevant commercial organisations to fail to prevent bribery. This offence under the Act applies to any "relevant commercial organisation" which fails to have "adequate procedures" in place to prevent "associated persons" from committing bribery. A person is "associated" with a commercial organisation if that person performs services for or on behalf of the commercial organisation. Such a person could be an employee, a subsidiary, a contractor, sub-contractor, supplier or even a joint venture partner.

The provisions of the Act do not automatically apply to Jersey commercial organisations. However, Jersey companies carrying on their business or a part of it in the UK will be caught by the Act under the definition of "relevant commercial organisation" which includes any body corporate, partnership or limited partnership, wherever incorporated or formed, that "carries on a business, or part of a business, in any part of the United Kingdom".

The Act does not define the term "carries on a business, or part of a business, in any part of the United Kingdom". However, the guidance published by the Ministry of Justice in England on 30 March 2011 provides some assistance with this point. They have confirmed that a company listed on the Official List of the LSE or AIM or a parent company with a UK subsidiary would not necessarily be caught by the Act by virtue of the listing alone and refer to businesses with a "demonstrable business presence in the UK", but the Ministry of Justice defers to the courts as the final arbiter on such issues. As such there is no absolute assurance that Jersey companies with UK subsidiaries or Jersey companies with UK listings would not fall within the scope of the Act.

Subsequent to the Guidance published by the Ministry of Justice, Richard Alderman, Director of the Serious Fraud Office has stated that:

"We have to look at the simple text in the Bribery Act and ask whether or not that foreign corporation is carrying on business [in the UK]. If it is, then corruption that it commits anywhere in the world is within our jurisdiction". Mr Alderman did not rule out the possibility that a UK listing might suffice.

The implications of this provision are far reaching: a Jersey company, partnership or limited partnership which carries on even part of its business in the UK could commit an offence under the Act in respect of bribery carried out outside the UK by a person who has no connection with the UK and who is performing services for that Jersey company, partnership or limited partnership outside the UK.

Q: Our Company has a UK subsidiary which provides certain services to us. Could we be guilty of an offence under the Act vis a vis this relationship?

A: In the absence of current guidance or ruling, it is reasonable to conclude that the presence of the UK subsidiary would not necessarily mean that the Jersey parent itself was carrying on business in the UK. Nonetheless, it could be a factor amongst others which may be relevant to the question. Therefore if your company carries on at least part of its business in the UK and comes within the scope of the "failure to prevent bribery" offence, it is possible that your company could be guilty of that offence if the UK company commits a bribe intending it to benefit your company.

Q: What happens if our company does nothing to prevent bribery?

A: In addition to any regulatory issues flowing from a failure to mitigate risk, any Jersey company carrying on business or part of a business in the UK can be prosecuted by the UK criminal courts for its failure to prevent bribery under the Act. A company will be considered to have failed to prevent bribery if it does not have adequate procedures in place which are designed to prevent persons associated with it from engaging in bribery.

Q: What can we do to prevent our company from committing a bribery offence?

A: In order to minimise the risk of prosecution under the Act, it is advisable for Jersey companies who might be said to carry out part of their business in the UK to put in place anti bribery procedures. Implementation of such procedures should also help companies to invoke the Act's "adequate procedures" defence to the offence of failing to prevent bribery.

The Ministry of Justice Guidance highlighted six key principles as being indicative of adequate procedures. These are:

  • Proportionate procedures:

The company's procedures to prevent bribery by persons associated with it should be proportionate to the bribery risks it faces and to the nature, scale and complexity of the company's activity. They should also be clear, practical, accessible, effectively implemented and enforced. A summary indication of what an anti corruption policy might include is contained within the Guidance.

  • Top level commitment:

The top level management of a commercial organisation (be it a board of directors, the owners or any other equivalent body or person) should be committed to preventing bribery by persons associated with it. They should foster a culture within the company in which bribery is never acceptable.Risk Assessment:

The company should assess the nature and extent of its exposure to the potential external and internal risks of bribery on its behalf by persons associated with it. The assessment should be periodic, informed and documented.

  • Due Diligence:

The company should apply due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for and on behalf of the organisation, in order to mitigate identified bribery risks.

  • Communication (including training):

The company should seek to ensure that its bribery prevention policies are embedded and understood throughout the company through internal and external communications, including training that is proportionate to the risks the company faces.

  • Monitoring and review:

The company should monitor and review procedures designed to prevent bribery by persons associated with it and should make improvements where necessary.

Q: We are about to enter negotiations for a new acquisition / transaction. Should we be carrying out any additional due diligence? Is there anything we need to be mindful of from a bribery perspective?

A: On 1 July 2011, Transparency International UK published a draft consultation on anti-bribery guidance for transactions. The guidance is intended to provide a practical tool for companies wishing to undertake anti-bribery due diligence in the course of mergers, acquisitions and investments.

The guidance notes state that while it is likely that much anti-bribery due diligence will be driven by legal obligations, it is important to recognise that taking a best practice approach is the surest way to avoid both legal liabilities and the potential financial and reputational damage that may come from investing in, purchasing or even just contracting with a company associated with bribery. The guidance notes state that anti-bribery due diligence is most effective when the purchaser itself has in place an anti-bribery programme and that care should be taken that bribery does not take place during the investment or acquisition process.

As regards anti-bribery due diligence, the guidance notes set out the following as being good practice principles:

  • It should be conducted for all but the smallest investments.
  • It should be conducted with sufficient depth and resources to ensure that it is undertaken effectively.
  • It should be conducted sufficiently early in the due diligence process.
  • The partners or board should provide oversight to the due diligence reviews. Bribery detected through due diligence should be reported to the authorities.
  • Information gained through due diligence should be passed on efficiently and effectively to the company's management prior to the investment being made.

When conducting anti-bribery due diligence, the following questions should be asked: Has bribery taken place historically?

  • Is it possible or likely that bribery is currently taking place?
  • If so, how widespread is it likely to be?
  • Does the target have in place an adequate anti-bribery programme to prevent bribery?
  • What would the likely impact be if bribery, historical or current, were discovered after the transaction had completed?

Q: We have a non-UK subsidiary operating in another country. The subsidiary carries out a bribe in that country. Are we, the Jersey company, guilty of an offence under the Act?

A: Potentially. The "failure to prevent bribery" provisions of the Act will only apply to a Jersey company where the company carries on a part of its business in the UK. So if your company carries on any business in the UK and your foreign subsidiary company carries out a bribe in another country then that act of bribery will fall within the jurisdiction of the Act.

The subsidiary is likely to be an "associated person". If you do not have "adequate procedures" in place and if the bribe is intended to benefit your company the actions of your subsidiary may result in liability for the parent company.

Q: Will the directors of the Jersey Company be personally liable for the bribe committed by a subsidiary company in another part of the world?

A: Statutory liability of Senior Officers who consent or connive in an act of bribery applies to passive bribery, active bribery and bribery of foreign public official offences, not to the "failure to prevent bribery" offence and therefore there would be no statutory liability in this example.

Q: Are facilitation payments allowed?

A: No.

Q: What do we do about facilitation payments if they are an inescapable part of doing business in the jurisdiction my business operates in?

A: While facilitation payments remain illegal, the Serious Fraud Office will apply the usual test on whether to prosecute a company or not (i.e. both a realistic prospect of conviction and prosecution in the public interest) and be guided by the Joint Guidance published in 2011 by the Director of the SFO and the Director of Public Prosecutions. The Joint Guidance lists a number of factors tending against prosecution for making facilitation payments, including:

  • A single small payment likely to result in only a nominal penalty;
  • The payment(s) came to light as a result of a genuinely proactive approach involving self-reporting and remedial action;
  • Where a commercial organisation has a clear and appropriate policy setting out procedures an individual should follow if facilitation payments are requested and these have been correctly following; and.
  • The payer was in a vulnerable position arising from the circumstances in which the payment was demanded.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.