Monday, 25 October 2010

Bribery ... business needs to prepare for the Bribery Act 2010

The Bribery Act 2010 received Royal Assent on 8th April 2010.  It is a complete overhaul of the law relating to bribery and covers bribery both in the UK and abroad.  The Act also goes a long way toward the implementation in English law of the requirements of the United Nations Convention against Corruption.  The Act will come into force in April 2011.  Explanatory Notes to the Act are available.  The Act extends to England and Wales, Scotland and Northern Ireland.

The key features of the Act are: 
  • a more effective legal framework to combat bribery in the public or private sectors
  •  replacement of the fragmented and complex offences at common law and in the Prevention of Corruption Acts 1889-1916 
  •  two general offences covering the offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage 
  •  a discrete offence of bribery of a foreign public official 
  •  a new offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf (it will be a defence if the organisation has adequate procedures in place to prevent bribery)

The last point relating to failure by a commercial organisation to prevent bribery is very important.  "Relevant commercial organisations" are basically registered companies and partnerships and they will have to have procedures in place to prevent bribery - e.g. where a person associated with a company bribes someone in order to get business for the company.  The Secretary of State is to issue guidance about such procedures and the Ministry of Justice is consulting about this - see "Consultation on guidance about commercial organisations preventing bribery."   The sections of the Act dealing with this aspect may be seen here.

Ethical Corporation offers one view as to how business should prepare so as to ensure that may have the defence, under section 7(2) of the Act, of "adequate procedures."  Nevertheless, applying the government's guidance (when issued) will be crucial since the Act clearly bases the defence on this guidance.

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