Commercial Organisations Face Tough New Bribery Law15.02.2010
The Bribery Bill had its third reading in the House of Lords on 08 February and now goes to the Commons for consideration. The purpose of the Bill is to provide a modern and comprehensive scheme of bribery offences to equip prosecutors in the Courts to deal effectively with bribery in the UK and abroad.
The new law could leave construction firms, together with other commercial organisations, open to bribery charges.
The key areas of the Bill are as follows:
- Replace old and fragmented legislation with a modern and consolidated Bribery law.
- Create offences of offering, promising or giving of a bribe, requesting, agreeing to receive or accepting of a bribe either in the UK or abroad, in the public or private sectors.
- Create a discreet offence of bribery of a foreign public official in order to obtain or retain business.
- Create a new offence in relation to commercial organisations which fail to prevent a bribe being paid by those who perform services for or on behalf of the organisation.
Commercial organisations will have a defence if they can show “adequate procedures” were in place to prevent bribery. Unfortunately there is no definition of the paragraph “adequate procedures”. However, in February the Government has agreed to amend the Bill to impose a duty on the Secretary of State to provide guidance. The amendment will help ensure that the guidance is issued properly and commercial organisations will welcome this duty on what will constitute adequate procedures under the Bill.
The penalties range from fines and terms of imprisonment, and the offence of failure of a commercial organisation to prevent bribery carries an unlimited fine.
The practical consequences for all commercial organisations are that they must prohibit bribery in any form either direct or indirect and by or for the organisation and commit to implementing systems to counter bribery. They should put in place staff training and ensure written procedures are available to staff and contracted consultants and consider amending contracts of employment to provide for termination in breach of compliance with the internal anti-corruption and bribery procedures. In addition, consideration should be made for including standard clauses in the organisation’s commercial contracts that replicate the clauses prohibiting bribery commonly used in public sector contracts.
Further, it is suggested that due diligence should be carried out before entering into arrangements with other parties, appropriate checks carried out during the processing of payments and a plan prepared to deal with the allegation of bribery.
There is some limited guidance from the Serious Fraud Office (SFO), and Transparency International publish business principles and practical guidance – www.transparency.org. The Secretary of State’s guidance is awaited.