UK Bribery Act 2010
Adequate procedures guidance
On 30 March 2011, the Ministry of Justice (MOJ) published the UK Bribery Act 2010 finalised Schedule 9 adequate procedures guidance. This means that from 1 July 2011, new and more stringent UK legislation will be in force to regulate bribery and corruption offences committed both in the UK and abroad.
So, after a number of months of initial consultation followed by a further period of recent review by Government and input from business, can organisations with business operations in the UK now be clearer about what’s expected of them to comply with the new legislation?
The revised guidance has been expanded in two key ways:
- It’s a fuller and more comprehensive document which seeks to address many of the previous key areas of concern voiced by the business community including issues concerning corporate hospitality and entertainment; the obligations of businesses to manage bribery risks within their supply chains; the impact of share listings in the UK; and the treatment of joint ventures and subsidiaries in the context of the actions of “associated persons”; and
- The finalised guidance has introduced the concept of proportionality. The guidance is explicit that companies are expected to adopt a proportionate approach to their management of bribery and corruption risks and that a “one size fits all” system of procedures and processes is not expected.
However, whilst the finalised guidance has gone a long way to address many of the concerns aired over the past few weeks, the MOJ has by no means gone so far as to produce the checklist or safe harbour style guidance that many businesses might have hoped for. Businesses will still clearly need to conduct their own assessments of the bribery and corruption risks faced by their operations and draw their own conclusions as to what policy and procedural enhancements might be required to address those risks.
The six general principles that are set out in the finalised guidance comprise:
- Proportionate procedures - an organisation should have anti-bribery and corruption procedures that are proportionate to the specific risks faced by the business and to the nature, scale and complexity of its operations.
- Top level commitment - senior management should demonstrate their commitment to preventing bribery, establish a culture that supports this commitment and communicate the company's anti-bribery policy throughout the organisation.
- Risk assessment - the company should perform a regular and comprehensive assessment of the nature and extent of its corruption risks.
- Due diligence - the company should understand the background and reputation of the parties with whom it does business.
- Communication (including training) - the company's anti-bribery policies should be effectively embedded in day to day business processes.
- Monitoring and review - the company should implement appropriate monitoring and review mechanisms to ensure compliance with relevant policies and procedures.
Doubtless questions will still remain for many about how the new legislation will be enforced and, in particular, how prosecutorial discretion will be exercised by the authorities when bringing prosecutions. However, it is now even more important for companies to ensure that they have a robust risk assessment process and that any policy or procedural enhancements have been properly identified and implemented by 1 July 2011.
Failure to do so will mean that there will be no possibility of an available “adequate procedures” defence should the authorities bring an action against an organisation for a bribe that has been paid on their behalf.