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/ Bribery Act 2010 – Update: April 2011

Bribery Act 2010 - Update: April 2011

Guidance on procedures which relevant commercial organisations can put in place to prevent bribery

On 30 March 2011, the Ministry of Justice announced that the Bribery Act 2010 will come into force on 1 July 2011. It also published its guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing (“Guidance”).
 

In addition, the Director of the Serious Fraud Office and the Director of Public Prosecutions published joint guidance on the Act for prosecutors.

 

Six Guidance Principles

As expected, the guidance focuses on six high-level principles and advocates a risk-based, proportionate and common-sense approach to the design of policies and procedures.

 

If an organisation can prove that it has adequate procedures in place, then they can form the basis of a defence to the offence of failing to prevent bribery under section 7 of the Bribery Act 2010.

 

The Guidance sets out six principles that are intended to give all commercial organisations a starting point for planning, implementing, monitoring and reviewing their bribery-free business regime. The principles have however, been amended from those in the draft guidance published in September 2010, to include two new principles, i.e. Principle 1: Proportionate procedures and Principle 5: Communication, in the place of the principles in the draft guidance headed: “Clear practical and accessible policies and procedures” and “Effective implementation”.

 

Principles as set out in the guidance:

1: Proportionate procedures.

 

2: Top level commitment.

 

3: Risk assessment.

 

4: Due diligence.

 

5: Communication.

 

6: Monitoring and review.

Clarity

The aim of the guidance is to give clarity and to help commercial organisations of all sizes and sectors understand the procedures they can put in place to prevent bribery (section 7(1)).

 

The guidance strongly acknowledges that different procedures will be appropriate depending on the size of the organisation, the sectors and jurisdictions in which it does business, as well as the nature of its business partners and transactions. Procedures should be proportionate to the risks faced by the organisation.

 

The guidance is not prescriptive but after each of the principles it does now suggest procedures which are designed to help organisations address the relevant principles. The onus is now on organisations to review their businesses, carry out the relevant risk assessments and determine whether their procedures are adequate to prevent bribery. Where they are not, they should seek to implement anti-bribery procedures without delay.

 

The Guidance endorses reasonable and proportionate hospitality and expenditure, and states that the more lavish the offering, the greater the inference that it is intended to influencethe granting of business or a form of business advantage.in return.

 

Companies will welcome the guidance and will look to draw as much comfort as possible from its more “permissive” tone, but the reality is that global companies will not look at their UK exposure in isolation and will not be relaxing their policies and procedures any time soon. Companies will need to be mindful of their global exposure.

 

Gregory Abrams Davidson Solicitors

 

If you or your business have any questions relating to Corporate or Commercial legal matters including concerns about The Bribery Act and its effects on your business and would like to discuss with a member of our team, please contact us for a free 30 minute consultation on 020 7979 2066. If you prefer, you can contact us by email at [email protected].

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