Brown paper bags and The Bribery Act 2010

Nov. 25, 2010 - PRLog -- The Bribery Act is arguably one of the most significant pieces of corporate governance legislation in years with wide reaching implications for companies and their boards alike.  
Whilst some believe that UK businesses are rarely involved in corrupt activities, the combination of globalisation and emerging markets plus a more difficult and competitive economy, signals a potential increase in bribes.  
After all, a bribe need not be as obvious as cash changing hands in a brown paper bag.  Paying a third party to speed up an installation of a business phone line in Asia or flying potential customers over to the Italian Grand Prix could quite easily lead to the business gaining "an advantage".  
In this article Julie Davies a Partner at Veale Wasbrough Vizards will examine how employing businesses can begin their preparations for The Bribery Act which is due to come into full force in April 2011.  
Offences
The Act provides for four bribery offences:-
•   Bribing - ie the offering, promising or giving of an advantage;
•   Being bribed - ie requesting or agreeing to receive or accepting an advantage;
•   Bribing a foreign official;  or
•   Failing to prevent associated persons committing any form of bribery.  
The last category of offence, known as the "corporate offence" should be of particular interest to employers as it will cover every member of staff, agent and consultant.  In addition, an offence can be committed in the UK and overseas meaning those organisations with staff/offices abroad, face an increased risk from remote and perhaps unsupervised workers securing/accepting a commercial advantage.  
The penalties for non-compliance are serious.  If a company is found guilty of corporate bribery, both the company and its directors could be subject to criminal sanctions including fines and imprisonment.  In addition the corporate activity of the business going forward could be curtailed.  
So what can a worried employer do?  
Defences
The Act contains a defence which enables companies to escape liability for the unlawful actions of its staff.  If it can show that it had in place "adequate procedures" designed to prevent those persons performing services on its behalf from committing bribery, the company and its directors could avoid punishment.  
What will constitute "adequate procedures" however is still being discussed.  The Government's consultation on this point ended recently and the intention is that guidance will be issued early next year.  In the meantime we can look to the draft guidance which sets out the procedures that would be expected by the Serious Fraud Office if ever it were called into investigate potential corrupt activity.  
•   Top level commitment - senior managers should set the tone and show unconditional support of the company's anti-bribery undertakings.  An anti-corruption/bribery officer should perhaps be appointed whose role it is to assess risk, undertake due diligence, train staff and to be on hand to receive reports/suspicions from staff.  
•   An implementation strategy - the company should be able to point to a well thought out strategy for dealing with its Bribery Act obligations.  This should include the adoption of clear policies and procedures, a training and awareness programme, regular risk assessments and a reporting mechanism.  Whenever a member of staff has attended any such training, received policies or has been updated on their obligations, this should be recorded and that record retained.  
•   Risk assessment - companies should assess their corporate activities and highlight risky areas such as overseas operations, performance/reward based business development roles, cash handling and third party agents.  
•   Due diligence - companies should assess all of its business partners for their own compliance regimes and perhaps even insist on the contractual right to audit accounts and transactions.  At the end of the day, the company will be liable for all "associated persons" and their activities to the extent that they have any impact on the company.  This will include any agents working on the company's behalf, any sub-contractors and any joint venture partners.  
•   Policies and procedures - the company should have clear procedures on anti-corruption/bribery including gifts and hospitality, charitable donations and political contributions.  It should also cover what staff should do if they suspect unlawful conduct and the penalties for breaking the rules.  More bespoke policies should deal with particular risky areas such as those staff working in isolation or those responsible for business development.  
•   Review - a monitoring and review programme should be put in place to regularly ensure that the implementation strategy remains fit for purpose, that new staff have been trained and that breaches have been dealt with properly.  
Next steps
There is no guarantee that undertaking these steps will absolve the company or its directors of responsibility if they faced an investigation by the SFO following an allegation of corrupt activity.  However there is no doubt that these steps will help and the more prepared and thought out the company's Bribery Act awareness approach is, the less likely corrupt activities will take place in the first place.  
Veale Wasbrough Vizards advise on all facets of business ethics including the Bribery Act. They also offer a FREE audit of your Bribery Act Policy to ensure compliance. To take advantage, contact Julie Davies on 0117 314 5347 or at jdavies@vwv.co.uk.  

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Veale Wasbrough Vizards advise on all facets of business ethics including the Bribery Act. They also offer a FREE audit of your Bribery Act Policy to ensure compliance. To take advantage, contact Julie Davies on 0117 314 5347 or at jdavies@vwv.co.uk.

Veale Wasbrough Vizards is a full service law firm providing sector focused services nationally in Education & charities, Healthcare, Public Sector and Family Owned Businesses. The firm also offers a dedicated service to Private clients.
More detail at www.vwv.co.uk.