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16/06/2011

Bribery Act implementation looms large - "adequate procedures" guidance and the prosecutorial guidelines offer some clarity for commercial organisations
David GeorgeDavid Horner

The corporate criminal offence of failing to prevent bribery (Corporate Offence) was arguably the most controversial aspect of the Bribery Act.  It is an offence of strict liability: an organisation can be found guilty whether or not it acted in bad faith, through negligence or with knowledge of the act of bribery.  An organisation can be liable for the acts of directors and employees and also those of any "associated person" - someone who performs services for or on behalf of the organisation.

The sweeping breadth of the Corporate Offence is counterbalanced by a statutory defence which exonerates organisations able to demonstrate "adequate procedures" were in place to prevent bribery.

Following an extensive (and extended) period of consultation, the government finally published the final guidance intended to assist commercial organisations in establishing adequate anti-bribery procedures[1].  A helpful “Quick Start Guide”, likely to prove a more appropriate starting point for many smaller and medium sized businesses, has also been made available for download[2]

In addition, the Director of the Serious Fraud Office and the Director of Public Prosecutions have published joint guidelines indicating how prosecutors will exercise their discretion in pursuing bribery prosecutions[3].

The core message from these publications is clear: organisations must demonstrate a genuine and proportionate commitment to tackling and preventing bribery.

The governmental guidance – containing a number of noticeable changes from the draft guidance published late last year - identifies 6 core principles to help organisations establish "adequate procedures":

•         Proportionate procedures

•         Top-level commitment

•         Risk assessment

•         Due diligence

•         Communication (including training)

•         Monitoring and review

The guidance makes clear there is no one-size-fits-all approach to anti-bribery procedures. Procedures will only be adequate if they correspond to the relevant risks.  Different divisions of the same organisation may face differing risks depending on where they do business and how frequently they interact with public officials.
 
The government's guidance is welcome, but grey areas persist.  When precisely does corporate hospitality become so lavish that it constitutes a bribe?  When will an overseas organisation be considered to have no demonstrable business presence in the UK, thereby removing it from the scope of Act?  Ultimately it will fall to the courts to provide clarity on these types of issues.

Meanwhile, the prosecutorial guidelines indicate that pre-meditated, serious or sustained acts of bribery are most likely to be prosecuted.  An organisation which self-reports and takes swift remedial action is much less likely to face prosecution and, if it is prosecuted, may face a civil sanction as opposed to a criminal sanction.  Organisations which fail to self-report, particularly those which choose not to report, will be much more likely to face criminal rather than civil sanctions.

Organisations should carefully review the available guidance and take this opportunity to ensure they have in place adequate anti-bribery procedures - asking themselves whether they can demonstrate a genuine and proportionate commitment to tackling and preventing bribery.


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