The conviction of three Pakistani cricketers demonstrates that bribery and corruption can be found everywhere and the recently enacted Bribery Act (the Act), which came into force on 1st July 2011, is the Government's latest attempt to regulate what is and what is not acceptable. However, there is still confusion about the implications of the new laws and what they might mean to individuals and businesses. Below we explain the law in this area and dispel some of the myths surrounding bribery.
The act of bribery no longer needs to be defined by monetary favours. Gifts, favours to family and friends and even a charitable donation could all fall within the definition of bribery under the Act.
The Act is not retrospective legislation, therefore any offences committed before the Act came into force in July 2011 will be dealt with by the existing legislation in force at the time of the offence. The effect of the new legislation is to abolish existing anti-bribery laws (the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916). It introduces the following offences:
1. A general offence of bribing another person;
2. A general offence of accepting a bribe;
3. A discrete offence of bribing a foreign public official; and
4. A new offence applicable to commercial organisations of failing to prevent bribery by persons associated with that organisation acting in the course of its business.
The penalties for committing an offence include up to 10 years in prison and/or an unlimited fine.
1. First General Offence
The key element of this offence is one person promising to give or giving an advantage (monetary or otherwise) intending to induce or reward improper actions or knowing that the acceptance of the advantage offered is improper.
Points to note
- There is no need to establish an intention to corrupt; and
- The person committing the offence does need to have an intention to gain or retain a business advantage or opportunity.
2. Second General Offence
The key element of this offence is a person requests, agrees to receive or accepts an advantage (monetary or otherwise) with the intention of inducing or rewarding improper actions or knowing that the acceptance of the advantage offered is improper.
Points to note
- There will also be an offence if the acceptance or agreement to accept the advantage constitutes improper performance; or
- Improper performance occurs in anticipation of an advantage.
3. Bribing a Foreign Public Official:
This offence is committed when a person offers, promises or gives a financial or other advantage with the intention of influencing the Foreign Public Official's capacity to gain a business advantage.
Points to note
- This offence does not cover accepting bribes
- It does not matter whether the offer is made directly or through a third party
4. The Corporate Offence
The Act has introduced a new Corporate Offence in anti corruption laws. A commercial organisation (includes a company partnership, body corporate carrying on business in the UK or body corporate formed in the UK but carrying on business anywhere else) will commit an offence if an associated person bribes another with the intention to obtain or retain a business opportunity for that commercial organisation.
Points to note
- The term "associated person" refers to the nature of the association not just their capacity. Hence it is not confined to agent, officer or employee;
- The bribery offence need not have any connection with the UK;
- The only defence to this offence is to show that you have "adequate" anti corruption procedures in place to prevent bribery by "associated persons";
- If a Corporate Offence is committed then a Senior Officer (secretary, director, partner) of the corporate entity may also be found guilty of a separate offence if it can be shown that they consented to or connived in the commission of the Corporate Offence.
What are "adequate" anti corruption procedures?
"Adequate procedures" should focus on a risk based approach and take into account the risks faced by each specific organisation.
However the following are some specific activities that businesses should consider policies on:
- Accepting gifts, hospitality or promotional activities;
- Travel and accommodation;
- Reporting gifts or hospitality for approval; and
- What to do if improper conduct is suspected.
This is a non-exhaustive list and specific considerations should be tailored to each individual business.
Activities that should never be accepted regardless of the organisation include:
- Accepting gifts with a disproportionate or excessive value threshold;
- Paying for gifts in a personal capacity to circumvent an employer's anti-bribery policy;
- Gifts that are cash payments or cash equivalent;
- For a purpose other than building a business relationship or showing courtesy.
Everyone must be vigilant to protect themselves by:
- Identifying the risks specific to your business;
- Providing to your staff an anti corruption policy to address any improper behaviour.
- Providing training to your staff;
- Implementing an adequate procedure for reporting any improper performance or potentially improper actions; and
- If you are an employee or senior officer, you must ensure you are aware of your firms anti corruption policy and report any behaviour you believe is suspicious or wrong.
The Ministry of Justice published guidance setting out six principles, namely:-
1. Proportionate procedures
2. Top-level commitment
3. Risk assessment
4. Due diligence
6. Monitoring and review
If you require any further information on the issues raised in this article or advice on drafting your organisation's anti corruption policy, please contact Claire Rollo or Alex Levinger in our Company/Commercial department.
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.