On 20th December the British Banking Association published its long awaited guidance for compliance with the  Bribery Act.  In its introductory remarks the BBA says:

“This [BBA] guidance focuses on the very important area of helping banks assess the policies and procedures they need to put in place to meet the requirements of the Act, and also considers the links with other requirements such as FSA regulations.

The guidance does not seek to provide a detailed analysis of pre-existing regulatory obligations to identify and assess bribery and corruption risks, but we are nonetheless active in this area. During 2012 the BBA will be undertaking separate work in relation to wider bribery and corruption risks, including the issue surrounding corrupt Politically Exposed Persons (PEPs).”

The guidance contains a summary of the Bribery Act (though we note it does not reference the six steps the SFO has outlined in relation to facilitation payments) and a comparison between the Bribery Act, the US Foreign Corrupt Practices Act (FCPA) and the Financial Services Authority (FSA) obligations for Banks.

In particular the BBA guidance looks at the Ministry of Justice ‘six principles’ guidance and applies them in the context of the Banking sector.    Many Banks and others in the financial services sector will find Chapter 4, entitled BBA guidance: Principles 2-6 especially useful.  In particular the analysis of Principle 3 (Risk Assessment) and Principle 4 (Due diligence) are welcome additions to the welter of material available on this subject looked at from the perspective of the Banking Sector.

There are also some useful suggestions in the context of gifts, corporate hospitality and promotional expenditure.

While there are many common aspects in relation to compliance with the Bribery Act for the Banking sector as a whole, in our experience, indivudually Banks have very different risk profiles.  For example, a  retail focussed banking group has a very different profile to a global investment bank with a focus on corporate relationships.

Likewise, banks also have very different  geographic footprints.  A predominantly UK based/focussed bank will have a very different profile to a bank with a large Asia Pac or Middle East footprint headquartered outside of the UK.  Contrasting global footprints bring with them real cultural challenges, for example in relation to corporate hospitality, gift giving etc.

For this reason, although the guidance is useful individual Banks will need to carefully assess their own businesses carefully in the context of Bribery Act compliance.

Following the publication of the BBA guidance we recommend that Banks and Financial Institutions compare and contrast their current policies and procedures with the BBA guidance and ensure that the BBA suggestions have been properly considered and taken into account where appropriate.