The key offences under the Bribery Act 2010 ("the Act") can be grouped into four categories:
The effect of the commercial organisation offence is that an organisation will automatically be guilty of an offence if an "associated person" bribes for its benefit unless it can establish that it had adequate procedures in place designed to prevent the bribery.
The UK Government has now published the guidance on adequate procedures as required by the Act. A "quick start" guide to the Act has also been published for small businesses.
Meaning of "commercial organisation" and "associated person"
The Government has used the guidance as an opportunity to make clear that the phrases "commercial organisation" and "associated person" should be given a wide meaning:-
The Government's approach: flexibility v lack of certainty
In introducing the guidance, the Secretary of State for Justice acknowledges that the Act contains "tough rules" and seeks to offer clarity on how the law will operate.
The guidance is based around general principles, the most important being "proportionality", and is not intended to be a "one-size-fits-all document".
This approach is appealing in one sense because it recognises that businesses are of different sizes with different resources. However, it may lead to uncertainty as to exactly what a commercial organisation should put in place to give it peace of mind that it has done enough.
The six principles
The guidance encourages organisations to consider the following principles in designing their "adequate procedures":
1. Proportionate procedures
This involves assessing the particular bribery risks faced by the organisation. Depending on these risks, an organisation may wish to cover issues such as corporate hospitality and whistle-blowing in its procedures.
2. Top level commitment
This is likely to include directors and senior managers communicating the organisation's anti-bribery position and being involved in developing the procedures.
3. Risk assessment
This principle includes taking into account changes in the organisation's operations including, for example, moving into a new market.
4. Due diligence
Mergers and acquisitions are identified as carrying particularly important due diligence implications. Adequate procedures in this regard may include due diligence during recruitment processes involving enquiries on background, expertise and business experience, subsequently verified by research and references.
This can include training and "external communications" such as a code of conduct or official statement.
6. Monitoring and review
Monitoring and review procedures could include staff surveys; formal periodic reviews and reports; and certification from industrial sector associations.
The Government has responded to the concerns surrounding the impact of the Act on provision of corporate hospitality by using the guidance to state that there is no intention to prohibit "reasonable and proportionate" hospitality intended to:
The guidance does, however, make clear that hospitality can be used as a bribe. Factors which the Government think are appropriate to be considered in this context include:
In this context, generally the more "lavish" the hospitality, the greater the inference that it is intended to influence the official. How is "lavish" determined or defined? It is not - although the guidance does state that industry standards may be relevant.
The guidance document contains eleven case studies and one of these specifically addresses corporate hospitality. The case study involves a firm of engineers which provides entertainment, quality dining and attendance at sporting occasions, as an "expression of appreciation of its long association with its business partners".
The guidance suggests that the firm could consider implementing procedures such as:
Once again, this case study comes with a health warning - it does not form part of the statutory guidance and is not intended to be "conclusive" of adequate procedures. Nonetheless, it provides a starting point for organisations gearing up for 1 July.