Bribery & Anti-Corruption
Bribery Act 2010
Bribery Act
- The Group is subject to the Bribery Act 2010 (the “Bribery Act“). This could significantly impact the conduct of the Group’s business, both in the UK and abroad, in that:
- it extends the crime of bribery to cover all private sector transactions;
- it contains a strict liability offence of failing to prevent bribery. An organisation will only have a defence to this offence if it can show it had “adequate procedures” in place to prevent bribery;
- its scope is extensive – the offences are very broadly defined and it has significant extra-territorial reach; and
- the offences contained in the Bribery Act carry criminal penalties for individuals and organisations. For individuals, a maximum prison sentence of ten years and/or an unlimited fine can be imposed; for companies, an unlimited fine can be imposed.
- The board should continue to review its anti-corruption procedures to ensure they are significantly robust to prevent corruption and to mitigate the risk of committing an offence under the Bribery Act.
Bribery offences
- The Bribery Act contains four offences:
- a general offence covering offering, promising or giving a bribe;
- a general offence covering requesting, agreeing to receive or accepting a bribe;
- a distinct offence of bribing a foreign public official to obtain or retain business; and
- a strict liability offence for commercial organisations where they fail to prevent bribery by those acting on their
The offence of failing to prevent bribery
- A commercial organisation commits an offence if a person associated with it bribes another person for that organisation’s benefit.
- A person is “associated” with a commercial organisation if it performs services for or on behalf of the organisation, regardless of the capacity in which they do so. This can be construed broadly and could cover our agents, employees, subsidiaries, intermediaries, joint venture partners and suppliers, all of whom could render the Group guilty of this offence.
- This is a strict liability offence: there is no need to prove negligence or the involvement and guilt of the ‘directing mind and will’ of the organisation. This makes the offence easier to prove and may lead to more corporate prosecutions and convictions.
Adequate procedures defence
- The organisation has a defence if it can prove it had “adequate procedures” in place to prevent bribery. “Adequate procedures” are not defined in the Bribery Act but the Ministry of Justice has published guidance on what adequate procedures might involve.
- The guidance sets out the following six principles for companies to follow:
- proportionate procedures;
- top level commitment;
- risk assessment;
- due diligence;
- communication; and
- monitoring and review.
- The board needs to continue to review the guidance, conduct regular risk assessments, and ensure that it has adequate procedures to prevent bribery in place.
- The Serious Fraud Office, which enforces the Bribery Act has indicated that these procedures should be appropriate to an organisation’s sector, size and risks.
Criminal penalties
- The potential consequences of being convicted of a bribery offence include criminal penalties for both individuals and companies:
- individuals can be jailed for up to ten years and/or receive an unlimited fine
- companies can receive unlimited fines; and
- a director convicted of a bribery offence could be disqualified from holding a director position for up to 15
- Fines for companies are likely to be
Particular risks for the Group
- Certain of the Group’s activities and operations expose it to particular risks of being involved in corruption and leave us vulnerable. In particular:
- Corporate hospitality and gifts: There is a risk that corporate hospitality, such as customer or supplier entertainment, and the giving or receiving of gifts might be seen as bribery, especially in dealings with foreign public officials. Lavish hospitality or gifts must be avoided, both the giving and receiving.
Facilitation payments: These are payments demanded by officials (or others) simply to secure or expedite the performance of their normal duties (for example, granting a licence, allowing goods to cross a border, and so on). These are commonplace in some jurisdictions, but the making of such payments, regardless of how small, is an offence under the Act, (Note: the equivalent US legislation (Foreign Corrupt Practices Act 1977) currently specifically exempts such payments provided they are not unlawful in the relevant jurisdiction, but the Bribery Act does )
Action points
- The following actions, which are proportionate to the Group and consistent with the Ministry of Justice’s guidance for commercial organisations about preventing bribery, should be carried out or considered:
- conduct a comprehensive Group-wide risk assessment;
- conduct a review of anti-corruption policies and procedures, especially taking into consideration corporate hospitality and facilitation payments;
- adopt a code of conduct for the Group which sets out in detail how employees and other associated persons should behave from an anti- corruption point of view;
- conduct due diligence on all “associated persons”, especially third parties in high risk jurisdictions or sectors;
- the Group’s anti-corruption statement and policies should be clearly published and accessible, both internally and externally;
- appoint a compliance officer either at Board level or who reports directly to the CEO or the Board; and
- provide budget to implement policy (for example, for extensive training and monitoring of staff in key risk areas and establishing disciplinary mechanisms).
