The UK Bribery Act 2010 comes into force this week following the publication by the UK Ministry of Justice (MOJ) earlier this year of its final guidance on what companies will need to do to comply.
Also in March 2011 the Directors of the Serious Fraud Office & the Director of Public Prosecutions produced joint guidance for prosecutors with the intention of ensuring consistency in approach when it comes to deciding whether to bring a prosecution under the Act.
As reported in previous issues of Safeguards, the UK Bribery Act 2010 creates four distinct crimes of:
- bribing another
- being bribed
- bribing a foreign official
- (for commercial organizations) failing to prevent bribery
Depending on the type of offence, penalties can include up to ten years imprisonment and/or unlimited fines. However, the Act made it clear that companies would be able to claim a full defence against the new offence of failing to prevent bribery if they could show that they had in place “adequate procedures” to prevent bribery.
What now?
If you haven’t already implemented procedures to prevent bribery and protect your business then you need to be taking immediate steps to do so.
The UK MOJ guidance has set out six principles for adequate procedures:
- Proportionality
- Top Level Commitment
- Risk Assessment
- Due Diligence
- Communication
- Monitoring and Review
The Guidance makes it clear that what counts as ‘adequate’ will depend on both the bribery risks that the company faces as well as the nature, size and complexity of its business.
The key first step is to conduct a robust assessment of the risk of bribery occurring within your business or by persons associated with it. The level of risk will be further affected by factors including the sectors and countries transactions occur in, the type and value of transactions and the nature of the relationships in place.
Another topic of widespread concern to business in the UK has been the anticipated approach of the Act to Corporate Hospitality. The published guidance has been clear in providing examples of reasonable and proportionate business hospitality with the key element here being that it should not be intended to influence a foreign public official or encourage the breach of a relevant duty defined in the Act. Corporate hospitality designed to promote products and services and in line with reasonable sector and country norms would not be expected to fall into the scope of the Act.
Email SGS Hong Kong Ltd. at mktg.hk@sgs.com for enquiries or visit www.hk.sgs.com.
