Bribery Act Guidance Released

A commercial organisation which fails to comply with the obligations set out in the Act will automatically become liable if any of its employees, contractors or agents pays a bribe to win or retain business for the organisation.

Key highlights

— The guidance does not change the wording of the Act;

— It does, however, clarify the Government’s intentions behind the Act with regard to certain key areas:

• Hospitality – offering a client reasonable and proportionate corporate hospitality will not suddenly become an offence. The guidance does, however, touch upon how lavish hospitality, where there is no clear business purpose, could fall foul of the Act;
• Facilitation payments – these will be illegal under the Act. However, prosecutors will consider the surrounding circumstances and whether prosecution is in the public interest;
• ‘Associated persons’ – the guidance makes it clear that it is unlikely an organisation would be liable for actions of a basic service provider – the corrupt party must be performing services on behalf of your business for you to be held liable;
• Joint Ventures – prosecutors will have to show that the corrupt business partner was performing a service for the defendant company. One joint venture partner may not be held liable for bribes committed by the other partner if it can show that it did not benefit from the bribe.

The Government has clearly attempted to tone down the implications of the Bribery Act following criticism from business leaders that the Act is too draconian. Much emphasis is put on proportionality. However, businesses should note that the guidance is just guidance. It is not binding. The wording of the Act is wide, and it remains to be seen what sort of cases will be prosecuted under the Act.

So what should my organisation do?

The primary defence available to commercial organisations facing bribery allegations is to demonstrate that the organisation has in place “adequate” anti-bribery procedures.

Some organisations will of course be more at risk than others and small companies may not require costly procedures to be put in place. It is, however, still the case that most organisations should, at the very least, undertake a review of the bribery risks it faces. A full understanding of the risks should form the foundation of any effective effort to prevent bribery.

If a business reviews its activities and believes that it may be at risk, it needs to act fast.

Following a review of the risks, organisations have 3 choices:

1. No action – This option may be suitable for small businesses operating solely within the UK and engaging very few, if any, contractors or agents to perform business services on their behalf;
2. Moderate action – Assess the bribery risks faced by the organisation and make any necessary adjustments applicable to your business to combat these risks. This may include reviewing existing policies and procedures, putting in place a simple anti corruption policy if necessary, determining sanctions for breach and providing appropriate training programmes for staff.
   
   This option is likely to be the most sensible option for most organisations.
    
3. Comprehensive action – Implement detailed anti bribery procedures, ensuring these are understood and complied with by all agents and contractors. This option is unlikely to be necessary for most small organisations, however, may well be sensible for large, multinational businesses.

At Mishcon de Reya we have developed Mishcon ASSURE®, a unique Bribery Act risk assessment product, and Mishcon Enable™, bespoke interactive Bribery Act training, to help our clients prepare for the Act.

Please click here to read a full copy of the guidance.

For more information on Mishcon ASSURE® or Mishcon Enable™, or for a discussion on how these changes will affect your business, please contact Gary Miller or Joanna Blackburn.