UK: Ministry of Justice announces delay for the Bribery Act

Last Updated: 21 July 2010
Article by Jonathan Pickworth and Neil Gerrard

Implementation delayed until April 2011

The Ministry of Justice has announced today (20 July 2010) that the implementation of the Bribery Act ("the Act") will be delayed until April 2011.  (The Act had been expected to come into force in October of this year).  The main reason for the delay appears to be the commitment given at the Parliamentary stage that the statutory guidance on "adequate procedures" required under section 9 would be published before implementation.  This guidance relates to the corporate offence of failing to prevent bribery under section 7, where the only defence is for the organisation to show that it had in place adequate procedures to prevent such bribery.  The commitment was given to enable businesses to have a short period to reflect on what changes they need to make to their compliance regimes before the Act comes into force. 

The Government also announced that it will launch a short consultation exercise in September 2010, which will allow businesses, legal advisers and other stakeholders to give their views.  The guidance will be then be published early in the New Year.

What will the guidance cover?

We expect the guidance to cover general principles relating to the establishment of an effective anti-bribery and corruption compliance programme such as:

  • A clear statement of an anti-bribery and corruption culture.
  • The responsibility of the Board for anti-bribery and corruption.
  • The appointment of a senior officer accountable for oversight of the anti-bribery and corruption programme.
  • Documented policies and procedures.
  • Risk assessment specific to the organisation.
  • Disciplinary processes to provide individual accountability.
  • Financial controls and record-keeping to minimise the risk of bribery.
  • Training to ensure dissemination of the anti-bribery and corruption culture to all staff.
  • Establishing whistleblowing procedures.
  • Regular and risk-based checks and auditing.

The clock is still ticking

Many businesses are not yet prepared for the Act coming into force, as revealed in our recent Bribery Act Report.  They may be breathing a sigh of relief that the implementation has been delayed until next year but the timetable is still extremely tight.  Those that delay the review of their anti-bribery and corruption compliance programmes until the adequate procedures guidance is published will probably have less than three months to assimilate and act upon it.  The clock is still ticking and businesses need to take action now. 

There will also be added pressure for those firms regulated by the Financial Services Authority ("FSA") as it is also focusing on anti-bribery and corruption measures.  Regulated firms should already have systems and controls in place to monitor third-party transactions in order to reduce the risk of illicit payments being made to win business.   However, in May the FSA published a report 1which criticised commercial insurance brokers for failing to adequately address the risks of becoming embroiled in corrupt practices.  The FSA has already taken regulatory action against some firms for these failures and has indicated that it may widen its thematic review work beyond the insurance sector.   

Why talk to us about anti-bribery and corruption compliance?

It is essential that all companies review their training, procedures, systems and controls, and take the necessary steps to mitigate the risks of their employees, subsidiaries and agents paying bribes on their behalf.  Prudent companies will have taken swift action after the Act received Royal Assent in April.  However, there will be many companies with a lot of work to do in the coming months and many of these would benefit from taking specialist advice as soon as possible.

DLA Piper's Corporate Crime and Investigations team has been giving advice and assistance to companies and individuals on regulatory risk, investigations and all aspects of white collar crime for over 15 years.  We have used this experience to develop an innovative risk assessment tool called 'proTECT'.  This product provides a cost effective way to help you to review your bribery and corruption risks by allowing you to:

  • check that a good tone from the top permeates throughout the organisation;
  • assess and benchmark your company's legal compliance culture;
  • compare and contrast levels and types of risk in different divisions and different locations;
  • allocate compliance resources more effectively;
  • identify new risks arising out of changes to your business;
  • analyse the extent of new risks arising from acquisitions; and
  • detect hidden, as well as actual, risks.

After analysing the results of the review, we consult with you and make recommendations for reducing and monitoring your bribery and corruption risks. 


For more information about proTECT and other services offered by the Corporate Crime and Investigations team please visit our website www.dlapiperrapidresponse.com

Footnote

1. Anti-bribery and Corruption in Commercial Insurance Broking: Reducing the risk of illicit payments or inducements to third parties

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.

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