Bribery Act 2010

As a result of the newly enacted Bribery Act, a Transparency International and City of London Corporation report provides an overview of corruption risk for City businesses, focusing on the issues raised by the Bribery Act. The report can be downloaded here

This legislation places a clear responsibility on the organisation to have adequate procedures and governance in place to prevent unlawful practice. As a starting point purchasers should ensure that the procedures they have in place for approving expenditure are working effectively and that any audits or reviews are properly documented. Legal advice may be required to ensure that the procedures in place are fit for purpose under the new legislation.

The Bribery Act reforms the criminal law to provide a new, modern and comprehensive scheme of bribery offences that will enable courts and prosecutors to respond more effectively to bribery at home or abroad.

The purpose of the Bribery Act is to:

• provide a more effective legal framework to combat bribery in the public or private sectors
• replace the fragmented and complex offences at common law and in the Prevention of Corruption Acts 1889-1916
• require the Secretary of State to publish guidance about procedures that relevant commercial organisations can put in place to prevent bribery on their behalf
• help tackle the threat that bribery poses to economic progress and development around the world.

The Bribery Act follows on from the Bribery Bill which was published in draft in March 2009 for pre-legislative scrutiny by a Joint Committee of both Houses of Parliament. The Bill received Royal Assent on 8 April 2010. The main provisions cover England, Wales, Scotland and Northern Ireland.

It is interesting to note that on average, only 21 people per year (and no corporate bodies) were prosecuted for public sector corruption between 1993 and 1997. By comparison, there was an average of around 23,000 prosecutions per year between 1997 and 2003 for private sector fraud.

In summary, the Bribery Act states that:

• Two general offences covering the offering, promising or giving of an advantage, and requesting, agreeing to receive or accepting of an advantage under s1 and 2 Bribery Act 2010. These apply to both public and private organisations, unlike the previous law.
• A new offence of failure of a commercial organisation to prevent bribery. This is a strict liability offence, that is, a person can be guilty of an offence even though they do not have the relevant 'guilty mind' for the offence. A company's guilt can be a result of an attempted or actual bribery on the company's behalf and this may be by an associated person, the Act provides examples of someone likely to be performing services as an employee, agent or subsidiary. Under s7(2), it will act as a defence to the offence if the company has adequate provisions in place to prevent bribery.
• Senior officers (including non-board level managers) can individually be held criminally liable for a company's bribery offences. It does not give a full explanation on what 'adequate provisions' are, this may be left for the courts to interpret.

Origins of the Act

The law for bribery was previously held in Public Bodies Corrupt Practices Act 1889, Prevention of Corruption Act 1906 and Prevention of Corruption Act 1916 and among some other legislation. The Act will repeal all of these when it comes into effect.

The law had been under review. The Law Commission published a report on reforming the law, with the final report being published in November 2008.

The law had previously been criticised. In 2007, the Serious Fraud Office stopped its investigation into BAE Systems' deals on arms deals in Saudi Arabia after receiving a pay out from BAE Systems. The Organisation for Economic Co-operation and Development stated its worry of 'the deficiencies in UK law on foreign bribery'. This was one of the most prominent cases.
 
Impacts for Buyers

The following areas have the most impact for buyers:

• It is an offence for a person to request, agree to receive, or receive the advantage directly or through a third party under s6(3) Bribery Act 2010. This has the possibility to affect a buyer throughout their supply chain.
• Under s7(1), a new offence of a commercial organisation failing to prevent bribery is a strict liability offence where a company can be found guilty if an associated person has committed bribery or attempted to commit bribery. Under s7(2), it creates a defence if the organisation has adequate procedures to prevent bribery. This may mean companies will put procedures in place quickly to protect themselves. It may be more likely that larger organisations put these in place as opposed to smaller organisations.
• Under s6 Bribery Act 2010, it creates a new offence of bribery of foreign officials. This will be of particular importance to organisations who deal internationally as there are countries where 'facilitation payments' are a common occurrence.

To download a copy of the Bribery Act click here >>

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