Adequate Procedures, Corporate hospitality, Facilitation payments - Written by on Wednesday, March 30, 2011 4:27 - 3 Comments

Bribery Act Guidance: Our first impressions & top takeaways

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The guidance is good news for business. Our top takeaways from the guidance published today are:

Proportionality is key

The guidance emphasises a proportionate approach to the implementation of procedures to prevent bribery which are necessary to use the defence under the Act.  This is welcome news.

Six Pillars of compliance

The guidance reinforces the ‘six principles approach’.  However, the principles have changed slightly from the draft guidance.  They are: Proportionate Procedures, Top-Level Commitment, Risk Assessment, Due Diligence, Communication (including training) and Monitoring and Review.

Overseas Companies

 The application of the Act to overseas companies will be a matter for the UK courts.  However, Government expects that organisations without a “demonstrable business presence” in the UK would not be caught by the Act.  As has been reported the guidance states a listing on the stock exchange should not be sufficient on its own for a company to be carrying on business in the UK. However there may be other connections and overseas businesses should factor these in.

Liability for third parties actions

The Guidance focuses on supply chains, joint ventures and subsidiaries and provides useful clarification.

Corporate hospitality & facilitation payments

There is also good news on corporate hospitality, ‘bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organisation, better to present products and services, or establish cordial relations’ is not targeted for prosecution.  However, facilitation payments remain outlawed; a point confirmed in the SFO prosecution guidance also published today (and which we have reviewed here).

Debarment discretionary for failure to prevent offence

Debarment from government contracts if convicted of a failure to prevent bribery will be a discretionary rather than mandatory outcome. The relevant regulations will be amended to reflect this.

Timing and enforcement approach

The Act comes into force on 1st July.  In response to the publication of the government guidance Richard Alderman told us:

“I welcome the Government’s published guidance on the Bribery Act.  The Act is important for the UK and UK business.  While we shall be enforcing the Act vigorously so that ethical businesses do not lose out to others that use bribery and corruption to win contracts, we are still keen to listen to the specific issues that companies have and to work with them to resolve problems pragmatically and fairly.”   

Our opinion

We welcome the guidance and are pleased to see the government emphasising a proportionate approach to putting in place procedures to prevent bribery. Other measures within the guidance provide welcome certainty for business. 

Businesses can now take steps to prepare for the new law with concrete guidelines and a risk based approach.

We shall interview Vivian Robinson QC General Counsel of the SFO on SFO enforcement of the Bribery Act under the published guidance this afternoon. Sign up here if you would like to join.

Image © Crown Copyright 2011

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3 Comments

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PHILIP HOULT
Mar 30, 2011 6:04

Hi there,

I am looking at the impact of this on local authorities and other public sector organisations. Do you have any views?

Also, I couldn’t find the reference to debarment. Can you please point me in the right direction.

Thanks.

Philip
PHILIP HOULT
Editor, Local Government Lawyer
http://www.localgovernmentlawyer.co.uk

Barry & Richard
Mar 31, 2011 13:58

Hi Philip, yes we do have views and would love to talk to you about them! If you’d like to touch base let us know. In the meantime, the reference to debarment was in the written statement that Ken Clarke made to the House of Commons. We have posted this this evening as it appears to have gone largely unnoticed although we thought it was significant when we wrote about it. We have as a result posted on it this evening and quoted the statement Ken Clarke made: here http://bit.ly/fX4o2w

U.K Government Issues Bribery Act Guidance, Sets Effective Date
Apr 1, 2011 11:20

[...] on July 1, 2011. The provisions in the Guidance document have been welcomed by some commentators, who note that the proportionate approach reflect in the document should be "good for business." At [...]

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