By Virginia Rylatt
Under Section 7(2) of the Act it is a defence for a relevant commercial organisation (i.e. one incorporated in the UK or carrying on business in the UK) to prove it had in place adequate procedures designed to prevent persons associated with it from bribing another person intending to obtain or retain business for the company or to obtain or retain an advantage in the conduct of the business for the company. Section 9 of the Act requires the Minister to issue Guidance as to what are adequate procedures.
While the Bribery Act 2010 is some 17 pages in length plus appendices, the Guidance as to procedures which relevant commercial organisations can put in place to prevent persons associated with them from bribing another, available here, amounts to some 43 pages. An essential starting point is to realise that the Guidance itself while setting out “Government Policy, and comments on Section 1, Offences of Bribing another Person and Section 6, Bribery of a Foreign Official” does not constitute the law. The only section for which the legislation is in place, is the guidance given in relation to the Defence of Section 7, Failure of Commercial Organisations to prevent Bribery. And within the Guidance regarding Section 7 the comments included about the Act itself do not have any legislative force.
The part of the Guidance which has legislative force is only that which sets out what will constitute adequate procedures to be put in place by commercial organisations wishing to prevent bribery being committed on their behalf.
The Guidance provides that such procedures should be “informed by six principles” however the principles are “not prescriptive.” Given that organisations may be a very different size “details of how organisations might apply these principles, taken as a whole, will vary, but the outcome should always be robust and effective anti-bribery procedures.”
All of this might sound quite daunting and no doubt would be if the SFO were given an unlimited budget with which to prosecute commercial organisations. A Freedom of Information Act inquiry from this firm in 2011 to the SFO provided the information that there was no segregated budget available within the overall budget of the SFO for prosecutions under the Bribery Act 2010. This may well mean in practice that a few high profile prosecutions will be all that the state can in practice afford to carry out in any one year.
The six principals are
- Proportionate Procedures
- Top Level Commitment
- Risk Assessment
- Due Diligence
- Communication (including training)
- Monitoring and Review.
The key is Risk Assessment, which it is proposed should reflect the following basic characteristics
- Oversight of the risk assessment by top level management
- Appropriate resourcing
- Identification of the internal and external information sources that will enable risk to be assessed and reviewed
- Due diligence inquiries
- Accurate and appropriate documentation of the risk assessment and its conclusions. The risk assessment is an ongoing obligation and new clients, new markets and new areas of business will require a re-evaluation of the risk faced by that commercial organisation.
To make it easier, Lombard Chambers have produced a Bribery Act Compliance Package. Click here for more details.