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Are you ready for the Bribery Act?

30 Jun 2011 3:49 BST Back
Are you ready for the Bribery Act?

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On 1 July The Bribery Act comes into force. So what exactly does this mean for UK businesses?

The Act puts the onus on businesses to prevent bribery by introducing a new strict liability corporate criminal offence for failing to do so and, if convicted, individuals and organisations face hefty penalties.

A key concern for companies is defining what constitutes a bribe – what about corporate hospitality or clearing goods through customs, for instance? This confusion was one of the reasons The Act was delayed – it was due to come into force in April.

In an effort to clear up some of the confusion surrounding the Act, the Ministry of Justice (MoJ) issued The Bribery Act 2010 guidance earlier this year.

In the guidance the MoJ assured businesses: “Bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations, is recognised as an established and important part of doing business and it is not the intention of the Act to criminalise such behaviour.”

A recent survey by Ernst & Young found that one in seven employees at large UK companies are prepared to offer cash payments to secure business and just over half are aware of an anti-bribery policy at their company. This shows that there is an urgent need for companies to look at their internal processes.

Director of public affairs at the Direct Marketing Association (DMA) Caroline Roberts says: “Companies now face the real prospect of fines if they transgress the new Bribery Act so it’s important that they ensure all their staff know exactly where the line is drawn between corporate hospitality and what could be construed as bribery. For this companies need to have a clear anti-bribery policy in place regarding what is appropriate business conduct and what isn’t.”

Key points of the Bribery Act
 
1) The Act is concerned with bribery only, not other forms of white-collar crime such as fraud, theft, accounting and record-keeping offences. A general definition would be giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly, or rewarding that person for having already done so.

2) Your organisation could be liable if a very senior person in the organisation or an employee or agent who performs services pays a bribe. However, you will have a full defence for this particular offence if you have adequate anti-bribery procedures in place.

3) You can continue to provide hospitality promotional or other business expenditure under the Act provided that it is reasonable and proportionate.

4) Facilitation payments (to induce officials to perform routine functions they are otherwise obligated to perform) are bribes.

5) No person or organisation can be prosecuted in England and Wales under the Act unless one of the two most senior prosecutors has agreed that a conviction is likely and that the prosecution will be in the public interest.

Posted by Nicola Carpenter

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