Bribery Act could trap the unwary

On 14th September 2010 draft guidance was published by the Ministry of Justice, setting out the expected 'standards' which commercial businesses are meant to observe to avoid the new criminal offence of bribery. A consultation period on the guidance will last for 8 weeks with the final guidance due to be published in early 2011.

The draft guidance sets out 6 principles which are intended to give all commercial businesses a starting point for planning, implementing, monitoring and making sure that there are no opportunities for bribery to occur in their organisations.

The new Bribery Act comes into force in April 2011 and will introduce a new criminal offence where a commercial organisation is guilty of an offence if an individual associated with the organisation (which could include agents) bribes another person with the intention of obtaining or retaining business for the organisation..

Broadly speaking, it is meant to be a defence for a commercial organisation to prove that it has adequate procedures in place to try and prevent that kind of conduct.

The draft guidance requires businesses which may be at risk to observe a number of key principles which are:-

• Regular and comprehensive risk assessments.
• Establishing a 'top down' culture or 'commitment' to say that bribery is never acceptable.
• Appropriate internal due diligence on internal procedures and policies.
• Making sure that internal policies and procedures are clear, practical, accessible and enforced.
• Proper implementation of internal procedures.
• Regular monitoring and review of internal procedures to make sure that key issues are identified and dealt with.

The legislation can in particular affect companies which do business through intermediaries or agents and can also include 'excessive' hospitality or promotional expenditure, payments to facilitate commercial transactions and political and charitable donations.

The law is not confined only to large businesses and applies equally to business of all sizes and the penalties include both imprisonment (for those involved) and financial penalties.

If you do need any advice or help on appropriate procedures and policies, please contact Simon Bates.