Anti bribery

Prior to the Bribery Act 2010 being introduced, bribery was recorded within UK legislation as a common law offence. The introduction of the Act and its application from 1 July 2011 onwards has formalised the law around bribery and made it clearer to businesses what constitutes an offence and what they should be doing to address the risk of bribery within their organisations. International enforcement agencies such as the Serious Fraud Office are collaborating on cross border cases, increasing the chance of detection of bribery and successful prosecution. Companies should review their existing procedures, processes, controls, governance and culture, their risk profile and anti-bribery programmes.

Overview – The Bribery Act 2010

The Act came into law on 1 July 2011 and includes:

  • A general bribery offence of offering a bribe;
  • A specific offence relating to the bribery of foreign public officials;
  • A new crime of "failure to prevent" bribery

The "failure to prevent" crime means that commercial organisations unable to demonstrate that they have implemented "adequate procedures" to prevent corrupt practices within their organisation or by third parties on their behalf, could be exposed to unlimited fines as well as other consequences, such as prevention from tendering for government business.

Punishments under the new law:

  • The offences of bribing another person, being bribed and bribing a foreign public official are punishable either by an unlimited fine, imprisonment of up to 10 years or both.
  • The new corporate offence of failure to prevent bribery is punishable by an unlimited fine.

Defences

A defence to the "failure to prevent" offence exists if it can be shown that "adequate procedures" were in place. This defence cannot apply where it has been proven that a senior officer of the organisation has consented to the offence and both the company and the senior officer are guilty of the offence.

Adequate procedures involve:

  1. Conducting a risk assessment of the whole of the business - Knowing and keeping up to date with the bribery risks you face in your sector and market.
  2. Maintaining top level commitment - Establishing a culture across the organisation in which bribery is unacceptable. This is easier to achieve in smaller/simpler businesses but the key is to make sure that the message is clear, unambiguous and made regularly.
  3. Performing due diligence - Knowing who you do business with; why, when and to whom you are releasing funds; seeking reciprocal anti-bribery agreements and being in a position to feel that business relationships are transparent and ethical.
  4. Ensuring the business has clear, practical and accessible policies and procedures - Applying policies to everyone you employ and business partners under your effective control and covering all relevant risks such as political and charitable contributions, gifts and hospitality, promotional expenses, and responding to demands for facilitation payments or when an allegation of bribery comes to light.
  5. Effective implementation - Ensuring that anti-bribery is embedded in the entity's internal controls, recruitment and remuneration policies, operations, communications and training on practical business issues.
  6. Monitoring and review - This relates to auditing and financial controls that are sensitive to bribery and are transparent, considering how regularly you need to review your policies and procedures, and whether external verification would help.

The only other defence to a bribery offence is where a person charged with bribery can prove that the conduct was necessary for the proper exercise of any function of an intelligence service or the armed forces when engaged in active service; or where the bribery was specifically authorised by some written law.

Prosecutions under the new Act

FC amongst first people to be charged under Bribery Act 2010 

A Financial Controller from a UK Plc, Sustainable AgroEnergy (SAE), a bio-fuel company, is, along with two colleagues, amongst the first to be charged under the Bribery Act 2010. The charges, which had been brought by the Serious Fraud Office, relate to an alleged biofuel scam whereby SAE sold investments linked to forestry plantations based in South East Asia. Investors were told that the plantations would produce biodiesel but were left out of pocket. Fung Fong Wong (former Financial Controller) has been charged with conspiring to commit fraud by false representation and conspiracy to furnish false information, along with Gary West (former Director and Chief Commercial Officer), James Whale (former CEO), and Stuart Stone (an Independent Financial Adviser associated with the company). Wong, West and Stone have also been charged with making and accepting a financial advantage under the Bribery Act 2010.

Court Clerk jailed for receiving bribes 

A court clerk was jailed for receiving bribes of up to £500 at a time in order to remove speeding tickets from the court database at Redbridge Magistrates Court where he worked as a clerk. He pleaded guilty to one act of Bribery and was jailed for six years (subsequently reduced to four).
Resources The Ministry of Justice has released guidance in the form of a "quick start" guide and full guidance is also available. The Director of Public Prosecutions has also released prosecution guidance.