Adequate Procedures, Corporate hospitality, Facilitation payments - Written by Barry & Richard on Wednesday, March 30, 2011 4:27 - 3 Comments
Bribery Act Guidance: Our first impressions & top takeaways
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 However, the principles have changed slightly from the draft guidance.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.
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.”
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