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Bribery Act 2010 – ALERT – Are you compliant?

18 January 2012 |

The provisions of the Act come into force in April 2011.

An obligation on all commercial organisations doing any business in the UK

Recent draft guidance published by the UK Government makes it clear
that all organisations carrying on any business in the UK, wherever they
are actually resident, should be taking steps to ensure that they have
adequate procedures designed to prevent acts of “bribery” by their
“associates”.

Without such adequate procedures in place, organisations themselves
and, potentially, their management, will be guilty of a criminal offence
if their associates commit an act of bribery.

Prevent bribery by “associates”

There are a number of offences under the Act but the principal issue
of concern here relates to “active bribery” by “associates”.  “Active
bribery” is…

…where a financial or other advantage is offered by A (the “associate”) to B (anyone) to reward improper performance of B’s duties (this can include B failing to act in accordance with obligations imposed in an employment contract, for example).

It is a very broad definition going well beyond the popular notion
of bribery entailing amounts of cash or other value being exchanged for
commercial favours.  It is illustrative to note that active bribery can
occur without the person being “bribed” being aware that anything
improper is taking place.

An “associate” is very widely defined.  It includes anyone who
performs services for or on behalf of the relevant commercial
organisation.  Associates may therefore include (but are not limited to)
employees, consultants, agents, sales agents, service providers and
suppliers and their sub-contractors, or subsidiary or other group
companies.

“Adequate procedures”

In determining whether there are “adequate” procedures in place, the
draft guidance published by the UK government provides for six
principles/compliance steps that organisations should follow to protect
themselves from prosecution

  • Risk assessment – assess the risks of bribery in your organisation and its “associates”
  • Top level commitment – a commitment to compliance from the highest rank
  • Due diligence – review and revise existing procedures as appropriate
  • Clear procedures – ensure there are clear procedures in place, including with “associates”, to address the risk of bribery
  • Effective implementation – of such procedures
  • Monitoring and review – a system to ensure that the procedures are
    reviewed and amended to catch new risks as they arise or are identified

The Act is complex and will require careful review as to how it will impact on your organisation.

Action

All commercial organisations conducting any business in the UK
should review their anti-bribery procedures in good time in advance of 1
April 2011 to ensure that they are adequate in the context of the very
wide definition of offences contained within the Act.

Abbiss Cadres offer a full compliance service to enable you to
assess and implement appropriate and proportionate procedures to manage
the real risks raised by the Act.

If you would like to discuss the implications raised by the Bribery Act please contact Guy Abbiss or David Widdowson on +44 20 3051 5711.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Circular 230 disclosure

To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

The author


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