The Ministry of Justice has published the long awaited finalised guidance on “adequate procedures” under the Bribery Act 2010. The Act will come into force on 1 July 2011.
Neill Blundell, partner and Head of Fraud at law firm Eversheds, commented: “The Bribery Act creates a new criminal corporate offence of failing to prevent bribery by a person associated with it, this includes employees, agents and intermediaries. In order to establish a defence to such a charge, an organisation will need to be able to demonstrate it has adequate anti-bribery procedures in place. The guidance published today is aimed at assisting organisations to understand what will constitute “adequate procedures”.
Mr Blundell continued: “The guidance remains non-prescriptive and indicates that “adequate procedures” should be built around six principles; proportionality, commitment to bribery prevention, risk assessment, due diligence, communication and monitoring and review. It is up to each organisation to implement policies and procedures that will minimise bribery risk taking into account their main risk areas of the organisation and its global presence. The higher the risks the more an organisation will need to do.
“Under the Act, facilitation payments remain illegal and the guidance does not seek to minimise this fact. However, the guidance does provide comfort in the area of gifts and entertainment. The guidance carries a clear message that in order for hospitality to be considered bribery, the prosecution will need to show that it was given with the intention to induce improper conduct from the other party with regard to their business, trade or profession.
“The guidance states that the government recognises that bona fide hospitality, promotion or expenditure seeking to improve a company’s image, present products or establish cordial relations is a legitimate and an important part of doing business. Such behaviour is not intended to be criminalised.
“Ensuring the above criteria are properly followed and implemented will assist organisations should they need to prove that they have taken the bribery risk seriously and implemented “adequate procedures” to prevent it occurring. For many companies this will mean new policies, new or improved training throughout the organisation including the introduction of on-line training tools for all employees and intermediaries and a more thorough approach to tackling the risk of bribery in the UK and abroad, all approved at a board level.”