The Bribery Act: Guidance on "Adequate Procedures"
The Bribery Act 2010, which comes into force on 1 July 2011, contains offences of active bribery (offering, promising or giving a bribe), passive bribery (requesting, agreeing to receive or accepting a bribe) and bribing a foreign public official. In addition, section 7 of the Act creates a new corporate offence of failure to prevent bribery.
A relevant commercial organisation(“A”) will be guilty of a section 7 offence if a person associated with A bribes another person with the intention of obtaining or retaining business for A, or an advantage in the conduct of A’s business. An“associated person” is one who performs services for or on behalf of A, for example, A’s employee, agent or subsidiary.
The section 7 offence attracts strict liability, but A has a complete defence if it can show (on the balance of probabilities) that it had in place “adequate procedures” designed to prevent bribery. On 30 March 2011, the Secretary of State published its guidance about such adequate procedures. Prosecutors must take the guidance into account when considering whether an organisation’s procedures are “adequate”, although the issue will ultimately be one for the courts to decide.
The guidance, which is expanded by 11 case studies, is based on the following six principles:
- proportionate procedures;
- top-level commitment
- risk assessment;
- due diligence;
- communication (including training); and
- monitoring and review.
The UK courts will have jurisdiction over a section 7 offence, even if the act of bribery is committed overseas, provided that A is incorporated or formed in the UK or carries on a business or part of a business in the UK. Ultimately, the courts will decide whether an organisation carries on part of a business in the UK but the guidance suggests that having securities listed in the UK or a UK subsidiary will not, of itself, be sufficient.
While the guidance provides useful clarification, the Act itself is broadly drafted, has a wide geographical reach, and several important issues remain to be decided by the courts. However, as adequate procedures form the basis of the only defence against the strict liability section 7 offence, organisations will be keen to review their anti-bribery procedures to ensure they are adequate before the Act comes into force on 1 July 2011.
The Secretary of State’s guidance can be found in full here: http://www.justice.gov.uk/guidance/making-and-reviewing-the-law/bribery.htm