The Bribery Act 2010 (UK) was passed by the UK Parliament on 8 April 2010 and is expected to progressively come into force from May. Because of its extraterritorial operation, it may have serious ramifications for Australian corporations which conduct some business activities in the UK. The offence of failing to prevent bribery applies to conduct of corporations outside the UK if the corporation (or partnership) carries on a business or part of its business within the UK even if that part of the business has no connection with the circumstances under which the bribery may have occurred.

The main offences under the Bribery Act are:

  • Direct or indirect offers of financial or other advantage intended to secure improper performance by any person of private or public functions and activities.
  • Requests for, or the improper acceptance of, financial or other advantage to secure improper performance by any person of private or public functions or activities (Ss1-5).

  • The bribery of a foreign official (which includes officials of a public international organisation). This offence is not dependent on improper performance. Instead, the key elements of the offence are: an intention to influence a foreign official in his official capacity; an intention to obtain/retain business, or to secure an advantage in the conduct of business; and the relevant act or omission is not permitted by local written law (or the rules of a public international organisation) S.6.

    A commercial organisation's failure to prevent Bribery by an associated person providing it with services is made a strict liability offence subject to a defence that adequate procedures were put in place to prevent that conduct (Ss.7-8). It is not necessary that an associated person should have been prosecuted (S.7 (3)). The meaning of services falls to be determined by reference to all the relevant circumstances (s8 (4)), but an employee will be presumed to be providing services for an employer. (s.8 (5)) Guidelines are to be published about procedures that should be put in place to ensure prevention (S.9) but there remains considerable uncertainty about what would constitute an adequate procedures defence, especially in cases involving conduct of an agent, distributor, sub-contractor or joint venturer. Officers of a company may commit an individual offence in respect of corporate offences (S.14).

It is vital that a corporation which conducts business in the UK ensures that it subscribes to and enforces anti-bribery policies that are sufficient to satisfy the "adequate procedures" requirements of the Act. In practice, this will require those corporations to show that they have carried out appropriate due diligence such as regular auditing and monitoring of agents, distributors, joint venturers, subcontractors and franchisees. Clients should therefore consider:

  • the adequacy of their codes of conduct and compliance programs
  • their anti-corruption supervisory and reporting lines - do they have an internal anti-corruption committee with reporting responsibilities aboard
  • their communication and training
  • their due diligence - selection and appointment of third parties
  • their due diligence - mergers and acquisitions
  • their whistle blowing systems
  • their remuneration structures
  • the implementation of their policies on gifts and corporate hospitality (not limited to foreign public officials)
  • their disciplinary procedures
  • their investigation protocols.

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.