The United Kingdom Bribery Act (Act) has generated considerable discussion within the foreign community in Qatar as it has implications not only for individuals and commercial organisations operating inside the United Kingdom, but also for British and foreign companies engaging in business transactions on an international scale. Although the explanatory notes that accompanied the Act were useful, they did not provide sufficient clarity in respect of certain aspects of the Act. In anticipation of the impending implementation of the Act on 1 July 2011, the United Kingdom Ministry of Justice recently produced guidance (Guidance) aimed at clarifying areas of ambiguity introduced by the Act.

We have commented on the content of the Act in previous articles, and accordingly this article focuses on certain clarifications provided in the Guidance.

The Six Principles

Although companies having in place "adequate procedures" to prevent bribery constitutes a defence under the Act, neither the text of the Act nor the explanatory notes set out the criteria characterising "adequate procedures". In the absence of clarity on this matter, many companies were left wondering whether their existing procedures would be categorised as "adequate", and to what degree (if any) new procedures would be required.

The Guidance has now clarified in the form of the "six principles" the way in which companies may determine the sufficiency of their anti-bribery procedures. The six principles are not prescriptive and are intended to allow a certain degree of flexibility, recognising that the challenges faced by a small company may differ considerably from those faced by a larger organisation. The six principles are as follows:

  1. Proportionate procedures – Bribery prevention procedures should be proportionate to the bribery risks the commercial organisation faces. Determining the "appropriate" proportion will depend on various factors including jurisdiction concerns, sophistication of business partners, and the specific business sector.
  2. Top level commitment – Members of the top level management should be committed to preventing bribery, and should actively participate in ensuring that employees understand the commercial organisation's bribery prevention procedures.
  3. Risk assessment – Commercial organisations should conduct periodic assessments of the nature and extent of their exposure to potential internal and external risks of bribery.
  4. Due diligence – Commercial organisations should take a proportionate and risk-based approach to due diligence procedures in respect of persons who perform or will perform services on behalf of the organisation.
  5. Communication – Commercial organisations should ensure its bribery prevention policies and procedures, including training programmes, are clearly and effectively communicated both within the organisation itself and externally.
  6. Monitoring and review – Commercial organisations should periodically monitor and review the procedures designed to prevent bribery, and implement improvements to those procedures as necessary.

Significantly, the Guidance clarifies that demonstrating the existence of "adequate procedures" will constitute a "full" defence for the commercial organisation. Furthermore, commercial organisations that do not face the risk of bribery are not required to have "adequate procedures" in place.

Hospitality and Facilitation Payment

The Guidance further clarifies the legislative position with respect to hospitality and facilitation payments. With regard to hospitality, the Guidance specifies that the Act does not prevent commercial organisations from providing bona fide hospitality, promotional and other business expenditures.

However, facilitation payments (described as payments meant to induce officials to perform or expedite routine functions they would normally perform) are considered bribes and will be caught by the Act. Such payments do not include "fast track" service fees or other administrative fees.

The Laws of Qatar

Section 6(3)(b) of the Act states that the provision of an "advantage" or similar type of facilitation payment will be considered to be a bribe if the foreign public official "is neither permitted nor required by the written law...to be influenced...by the offer, promise or gift". For the purposes of Section 6(3)(b), "written law" includes the law or territory in relation to which the official is an foreign public official.

In order to understand the "written law" as it applies to Qatar, a brief review is required of Law No (11) of 2004 promulgating the Qatar Penal Code (Penal Code). The bribery offences under the Penal Code relate to the bribing of public officials. According to Article 140 of the Penal Code, the acceptance or solicitation of money, a benefit or the promise of something by a public official which is intended to generate the conduct or omission of an act that is included in his office, or if he acts as though it is included therein, is punishable by up to ten years imprisonment and a fine not exceeding the amount of the bribe (but at least 5000 Riyals).

Article 141 applies to a person offering money, interest or a promise to a public official who accepts the bribe. The person making the offer (and any intermediaries who facilitate the bribe) may be punished by up to ten years imprisonment and a fine not exceeding the amount of the bribe (but at least 5000 Riyals). However, the same article provides that the penalty shall not be applied if the person offering the bribe or the intermediary informs the concerned authorities about the offence before its discovery.

Furthermore, Article 142 provides that an act is considered to be an act of bribery where no previous agreement between the briber and the official receiving the bribe has been made, but the official omitted or provided a service included in his duties with the intention of obtaining a reward for it, and if he has accepted money or a benefit afterwards from the person to whom the service was provided. Finally Article 145 makes illegal the offer of bribery to an official who does not accept the offer.

In summary, the Penal Code punishes all forms of bribery and its applicability is not limited to the person making the bribe but includes penalties for both the person offering the bribe and the person receiving it.

No full defence in Qatar

Although the Act provides a full defence to commercial organisations that have in place "adequate procedures", no equivalent defence is found in the Penal Code.

With the implementation date fast approaching, both individuals and commercial organisations should review the way in which they operate to ensure that their dealings with foreign public officials would not be construed as offering a bribe or other advantage in return for the commission or omission of an act by that official. Although this appears to be an obvious point, the Act is sufficiently broad to warrant a re-evaluation of the way in which individuals and companies who are subject to the Act do business in other countries.

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.