UK: UK Ministry Of Justice Publishes Guidance To The UK Bribery Act; Announces Act To Enter Into Force On 1 July 2011

Today, the UK Ministry of Justice published the Guidance to the Bribery Act 2010 ("the Guidance"), and announced that the Act will come into force on 1 July 2011.  The publication of this Guidance, which was a pre-requisite to the Act coming into force, and the implementation of the Act mark the culmination of nearly ten years of government consultation surrounding reform of the United Kingdom's anti-bribery laws and comes one year after the Bribery Act was finalised and passed by Parliament.1 Contemporaneous with the Guidance, the government also published a separate guidance document concerning the enforcement of the Bribery Act ("the Enforcement Guidelines"), which provides additional detail concerning standards by which UK prosecutors will exercise their discretion in bringing criminal cases under the Act.

The Guidance and Enforcement Guidelines include significant interpretive comments concerning the scope of the Act, and should be reviewed carefully by practitioners and company personnel responsible for anti-corruption compliance.  Among the highlights are the following:

  • Jurisdiction.  The Guidance indicates that the jurisdiction of the Act will be evaluated on the basis of a "common sense" approach and provides insightful commentary concerning the jurisdictional scope of the corporate offence in Section 7 of the Act. 
    • The Guidance states, for example, that the mere fact that a company's securities have been listed and therefore trade on the London Stock Exchange would not be expected, in itself, to qualify that company as "carrying on a business" or "part of a business" in the United Kingdom and would not therefore fall within the definition of a relevant "commercial organisation" under the Section 7 offence.  This is consistent with the views expressed by many commentators, although there had been some speculation that the Bribery Act might be interpreted to extend to companies simply on the basis of being traded on UK exchanges.
    • In addition, the Guidance indicates that prosecution will be unlikely in cases where a UK entity merely owns an overseas entity that engages in bribery, but the overseas affiliate did not intend to obtain or retain business for the parent company:  "The fact that an organisation benefits indirectly from a bribe is very unlikely, in itself, to amount to proof of the specific intention required by the offence. Without proof of the required intention, liability will not accrue through simple corporate ownership or investment, or through the payment of dividends or provision of loans by a subsidiary to its parent."
  • Supply Chain Control Responsibility.  The Guidance makes it clear that an "associated person," for the purposes of the Section 7 offence, has a wide meaning that can cover contractors and suppliers.  However, the Guidance notes that in cases where a supply chain involves several entities or a project is to be performed by a prime contractor with a series of sub-contractors, "an organisation is likely only to exercise control over its relationship with its contractual counterparty."  In those cases, the Guidance indicates that organisations should employ their anti-bribery procedures in the relationship with their contractual counterparty, and request that the counterparty adopt a similar approach with the next party.
  • Joint Ventures.  The Guidance also considers the Act as it applies to joint ventures. The Guidance indicates that the mere participation in a joint venture will not necessarily trigger liability for a joint venture participant "simply by virtue of them benefiting indirectly from the bribe through their investment in or ownership of the joint venture."  Rather, the participant's relationship to the underlying misconduct, and the degree of control that the participant holds over the joint venture, will be relevant factors.
  • Facilitation Payments.  Concerning the approach to enforcement of bribes involving "facilitating payments" (which, in contrast to US law, are prohibited under the Bribery Act), the Guidance refers to the new Enforcement Guidelines which sets out factors in favour and against a prosecution when a facilitation payment has been made. For example, facilitation payments which come to light as a result of a genuinely proactive approach involving self-reporting and remedial action is a factor tending against prosecution, as is a situation 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 followed.
  • Hospitality.  Consistent with views expressed regularly over the last year by the Serious Fraud Office, the Guidance confirms that the government does not intend the Act to prohibit reasonable and proportionate hospitality and promotional or other similar business expenditures.
  • Cooperation and Disclosure.  The Guidance briefly addresses the prospect of cooperating with the UK government in enforcement matters, noting that "the commercial organisation's willingness to co-operate with an investigation under the Bribery Act and to make a full disclosure will also be taken into account in any decision as to whether it is appropriate to commence criminal proceedings."  (This echoes similar comments that have been made regularly by the Serious Fraud Office over the last two years.)

Finally, the Guidance also provides commentary concerning six core "principles" of compliance that should underpin effective anti-corruption compliance programs, as well as a series of case scenarios that highlight those principles in implementation.  The six principles (which also were reflected in the Ministry of Justice's draft "adequate procedures" guidance from September 2010 and broadly reflect other international anti-corruption best practices standards), include:

(1) adopting proportionate procedures tailored to the size and nature of the business;

(2) ensuring "top-level commitment" to the compliance program within the corporate organisation;

(3) conducting risk assessments to evaluate where corruption risks may present themselves in the company's operations;

(4) conducting due diligence on key third party service providers and in the employee hiring process;

(5) implementing anti-corruption training programs; and

(6) monitoring and reviewing the implementation of the compliance program.

It is important to keep in mind that the Guidance does not carry the force of law —it does not amend the Bribery Act, the Ministry of Justice can revise the Guidance at any point in the future, and neither courts or prosecutors are bound by the Guidance.  However, the Guidance provides a useful basis to assist companies in evaluating likely risk scenarios under the Bribery Act and developing proportionate compliance procedures. 

The separate Enforcement Guidelines are also worth close study by those involved in Bribery Act compliance. The guidelines set out the approach of the Director of Public Prosecutions and the Director of the Serious Fraud Office in deciding whether to bring a prosecution under the Act, including particular factors that will be considered in evaluating whether it is in the public interest to bring actions under the various offences in the Act.

Summary

In his celebrated novel Bleak House, Charles Dickens wrote of the fictional case Jarndyce and Jarndyce that "this scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. . . . Innumerable children have been born into the cause; innumerable old people have died out of it. . . . The little plaintiff or defendant who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled has grown up, possessed himself of a real horse, and trotted away into the other world."  Similar sentiments might be expressed about the Bribery Act, after the protracted consultations leading up to it, mountains of commentary surrounding it, and more than a year of deliberation over "adequate procedures" and prosecutorial guidelines. Whether that time has been spent productively is now, however, a matter for historians or future novelists.

While some groups have already decried the perceived "watering down" of the statute as a result of the Guidance, the Act, as mentioned above, will come into force on 1 July.  Companies that are subject to the Act are well-advised to evaluate their anti-corruption procedures and consider whether those procedures —and the manner in which they have been implemented and absorbed by company personnel —will be viewed favourably in light of the new Ministry of Justice guidance and the Bribery Act's "adequate procedures" affirmative defence.  For companies that have already implemented strong anti-corruption compliance programmes (in light of pre-existing UK laws or other regimes, such as the US Foreign Corrupt Practices Act), relatively little may need to be done.  For other companies, the entry into force of the Bribery Act presents an opportunity to build effective anti-corruption corporate policies, which will be beneficial not only from the standpoint of the Bribery Act, but also other UK and international anti-corruption laws, debarment regimes, and commercial liability risks that corruption increasing involves.

Footnote

1 For an overview of the Act including the offences created under it, see our alert.

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.

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.