The Bribery Act 2010 came into force on 1 July 2011. Its aim is to reform the criminal law of bribery and provide for a new consolidated scheme of bribery offences to cover bribery in the UK and abroad.
What is a bribe?
Bribery is a form of corruption, it involves the offering of a gift, often but not limited to money, that will influence another person’s behaviour.
A bribe is a financial or other advantage offered, promised or given to induce a person to perform a relevant function or activity improperly or to reward them for doing so. This can include cash, gifts, hospitality and entertainment, political or charitable donations, sponsorship and publicity. It can be given before or after an event or not at all as it includes an offer or a promise.
The Act creates four offences:
1) Bribing another person
2) Being bribed – receiving a bribe (passive bribery)
3) Bribing a foreign public official
4) Failure by a “commercial organisation” to prevent bribery (failure to prevent)
The “corporate offence”
A commercial organisation commits an offence if a person associated with the commercial organisation bribes another person intending to obtain or retain business.
A bribe for the purposes of the corporate offence means bribing another person and bribing a foreign public official but not being bribed.
A relevant commercial organisation is either a body incorporated or formed under UK law (including a partnership), which carries on business in the UK or elsewhere; or any other body corporate or partnership (wherever formed) which carries on business in the UK.
A person is associated with an organisation if they ‘perform services’ for or on behalf of that organisation. This includes agents, subsidiaries and subcontractors where the organisation has control over them.
An organisation that falls foul of the corporate offence could become:
• a named defendant in a criminal prosecution;
• subject to an unlimited fine;
• subject to civil actions from competitors or other affected third parties;
• exposed to significant legal costs;
• debarred from selling or providing services to the public sector; and/or
• individual criminal liabilities (including imprisonment).
How far is hospitality bribery?
The main difficulty for businesses is that it is sometimes difficult to differentiate between corporate hospitality and an illegal attempt to gain business benefits. The Ministry of Justice guidance refers to transparent, proportionate, reasonable and bona fide hospitality. Businesses are recommended to consider the Act before arranging lavish gifts or events that could be interpreted as a bribe.
Protecting your (organisation’s) position and minimising risk
An organisation will have a defence if it can prove that it had in place adequate procedures designed to prevent associated persons undertaking such conduct.
The six principles of adequate procedures are:
2) Top level commitment
3) Risk assessment
4) Due diligence
6) Monitoring and review
The UK’s national standards body is developing a new BS 10500 standard which will help businesses verify that they have anti-bribery policies in place. BHW can help your organisation develop an anti-bribery policy taking into consideration the government guidelines.