New Bribery Laws to start - Begin planning NOW!

After much delay and heavy international criticism, the UK Government has at last confirmed that the Bribery Act 2010 will commence on 1st July 2011.

The start date was delayed to await the publication of guidance by the Ministry of Justice. The guidance was published on Wednesday 30th March and can be found on their website at www.justice.gov.uk/guidance/bribery.htm.

The Act is aimed at modernising outdated anti-corruption laws. One highlight is the new corporate offence of failing to prevent bribery by persons working on behalf of a business. As well as employees, this may extend to agents both in the UK and overseas. This will cause a degree of concern for those organisations seeking to develop their business in expanding economies, such as those in the Far East where use of Agents is normal practice.

The corporate offence carries potential penalties of unlimited fines and possible exclusion from any public contract works for any convicted organisation. Companies will also of course be concerned at the damage to their reputations, if they do find themselves appearing in court.

Any company will have a defence if it can prove that it had in place 'adequate procedures' to prevent bribery taking place. This will include suitable and adequate policies and procedures to deter employees or agents from paying bribes to improperly influence others, such as customers or potential clients.

Companies are advised within the guidance to undertake due diligence when dealing with other businesses to ensure they are not exposed to the corporate offence by association. This will include requesting a copy of the anti-bribery policies of those organisations with which they have a business relationship or are looking to enter into such agreements with. It is expected that a request for such policies will become the norm in tendering processes, particularly but not exclusively those in the public sector.

The Act also creates personal criminal liability for the directors or senior management. They could face up to 10 years in prison if their business becomes involved in bribery with their consent, or where they have turned a blind eye to its existence.