UK: Bribery Bill Reaches Half Way Stage

Last Updated: 14 April 2010
Article by Jonathan Pickworth

THE LEGISLATIVE TRAIL TO THE HOUSE OF COMMONS

In order to become law the Bribery Bill ("Bill") has to be debated and approved by both the House of Commons and the House of Lords. The House of Lords has completed its assessment of the Bill with a series of debates and the Bill has been passed to the House of Commons with very few amendments being made.

  • 19 November 2009: introductory First Reading in the House of Lords. This reading was a formality and there was no debate.
  • 9 December 2009: Second Reading. This was the first opportunity for the Members of the Lords to debate and vote on the main principles and purpose of the Bill. During that debate it became apparent that the Bill has widespread cross-party support with Lord Williamson being moved to say that it is unusual to have a second reading that "approximates to a lovefest...".
  • 7 January 2010: Grand Committee. An opportunity for detailed examination and debate on amendments.
  • 2 February 2010: returned to the House for the report stage. A further opportunity to consider amendments. There was further lengthy debate on the issues discussed in Grand Committee.
  • 8 February 2010: Third, and final, Reading in the House of Lords.
  • 9 February: First Reading in the House of Commons.

AMENDMENTS TO THE DRAFT BILL

Very few amendments have been made to the Bill as it first appeared in the Lords. The main features remain as follows:

  • Two general bribery offences covering:
    • the offer, promise and giving of an advantage; or
    • the request, agreeing to receive or acceptance of an advantage.
  • A discrete offence of bribery of a foreign public official.
  • A new strict liability corporate offence of failing to prevent bribery. There is a limited defence for those companies that can show (on the balance of probabilities) that they had "adequate procedures" in place. (The Bill provides no further detail on what would constitute adequate procedures.)
  • Extra-territorial jurisdiction to prosecute bribery committed abroad by persons resident in the UK, UK nationals and UK corporate bodies.
  • There is no provision for facilitation payments to be permitted - they will remain illegal.
  • A maximum penalty of 10 years imprisonment for all new offences, save the corporate offence, which will carry an unlimited fine.

In fact the only amendment of note for corporates is the fact that the Secretary of State will now be obliged to publish guidance on what procedures commercial organisations can put in place to prevent bribery. A new clause 9 has been inserted into the Bill stipulating that, "The Secretary of State must publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing...".

This is an important amendment as the original draft Bill did not impose a statutory duty on the Government to produce any official guidance on what standards were to be expected of corporates in their efforts to prevent bribery. This provoked a great deal of criticism during the various debates as the absence of official guidance effectively left corporates blind as to the standards they could rely upon in court when trying to use the 'adequate procedures' defence to a charge of failing to prevent bribery.

Moving forward, the Government has committed to consulting with business so that guidance can be published after the Bill receives Royal Assent. The consultation is expected to take place in June or July. Recognising that it is equally important that corporates have time to implement the guidance before the new law comes into force, the Justice Secretary, Jack Straw, has indicated that he will issue a written statement on implementation in due course.

WHAT HAPPENS NEXT

The Bill will go through a similar procedure in the House of Commons. At the time of writing, the Bill has been presented to the Commons with a First Reading (9 February) but there is no date set for the Second Reading and debate.

The latest version of the Bill can be found at: www.publications.parliament.uk/pa/cm200910/ cmbills/069/10069.i-ii.html

WHAT ACTION SHOULD COMPANIES TAKE NOW?

The Bill has proceeded apace so far and has not had as many amendments or sticking points as might have been envisaged. The principles behind the Bill clearly have widespread cross-party support and it has now reached the half-way stage in the process to becoming law. It remains to be seen whether the House of Commons, or the calling of a general election, can throw its swift progress off course.

If the Bill becomes law it will make it easier for prosecutors to bring charges against corporates, so the message for all companies is that they must take steps to ensure that they have effective and proportionate antibribery and compliance programmes in place to minimise their risks.

For those companies who have not already addressed, or reassessed, the anti-bribery and corruption risks for their business, there is an urgent need to develop or update their anti-bribery and corruption programme. The board, senior executives and operational business managers all need to be engaged, and expert advice is essential, if the programme is to be successful and cost-effective.

Prosecutors have welcomed the proposals in the Bill and with the conclusion of the BAE Systems investigation, the Serious Fraud Offices is going to have more resources at its disposal to investigate and prosecute allegations of bribery and corruption.

HOW CAN DLA PIPER HELP?

DLA Piper's Corporate Crime, Investigations and Compliance team can provide valuable advice and assistance to companies and individuals on anti-bribery and corruption measures and managing risk: whether that be training your staff, running risk and compliance audits, advising in times of crisis, managing negotiations with the regulators in the UK or overseas, or defending you in court.

We can help you prepare for the introduction of the new law with our innovative training, risk assessment and crisis management services:

Counting the Cost

Our new, acclaimed film, designed to be used with boards of directors and key internal gatekeepers at companies to raise awareness of risks and to focus on best practices in preventing and detecting fraud and bribery and corruption. The film is designed to be run as part of a risk awareness training workshop with relevance to the work of non-executive directors, executive management, in-house counsel, company secretaries, compliance officers, internal auditors and those engaged in risk management and D&O insurance procurement.

proTECT

We have used our compliance experience to develop an online gap analysis tool. Wherever you operate in the world, whatever you do, you run the risk of attack by regulatory agencies, prosecuting authorities and US class action law firms. We proTECT your business by proactively enabling you to: target your preventative spend; evaluate where your risks are highest using our expertly devised online questionnaires (including bribery and corruption); create an ethical compliance culture; and train your workforce so that you are better placed to detect and prevent misconduct and reduce the risk of future press attention, regulatory intervention or court proceedings.

Rapid Response

Regardless of how carefully a business manages risk, regulatory risk can never be entirely eliminated. Even if a company has not contravened regulation, or broken the law, it may still be subject to a raid. Accidents, incidents and raids by regulators often take place at the crack of dawn, at weekends, or at times when least expected. We have therefore established a Global Rapid Response, 24/7 telephone helpline service aimed solely at handling crises and major incidents. The response is available 24 hours a day, 365 days of the year, from anywhere in the world.

For more information about rapid response, a trailer of Counting the Cost, and an opportunity to register for a complimentary one-hour initial consultation, please visit www.dlapiper.com/rapidresponse.

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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