Biggart Baillie Solicitors

Bribery Act 2010 - Ministry of Justice publishes draft guidance for commercial organisations on adequate procedures for preventing bribery

The UK Ministry of Justice (“MoJ”) has published draft Guidance on the procedures that commercial organisations should put in place to prevent persons associated with them from committing the new offence of bribery. 

The Bribery Act 2010 is expected to come into force in April 2011.  Upon coming into force, the Act will have significant implications for both the public sector and for commercial organisations in the private sector.

In particular, Section 7 of the Bribery Act 2010 creates a criminal offence of a failure to prevent bribery on the part of commercial organisations.  The new law is intended to encourage commercial organisations to take steps to address the risks of bribery. Section 7 provides a statutory defence to a charge where a commercial organisation can demonstrate that it has put “adequate” bribery prevention procedures in place.

Everyone affected by the Act faces the challenge of reviewing and adapting their business procedures to safeguard themselves (and certain officers) from substantial penalties.

The MoJ’s draft Guidance sets out 6 principles for commercial organisations to follow in relation to their new procedures for preventing bribery. The 6 principles do not propose any particular procedures in themselves. They are intended to be used as a flexible guide to deciding what procedures are right for an organisation. In this the MoJ has recognised that the procedures that may be suitable for SMEs are likely to be quite different to those for large multinational PLCs. 

The 6 principles are:-

1. Risk Assessment
   
   The commercial organisation should regularly and comprehensively assess the nature and extent of the risks relating to bribery to which it is exposed.
   
   
2. Top Level commitment
   
   The top level management of a commercial organisation (e.g. the board of directors) should be committed to preventing bribery:-
   
   (a) They should establish a culture within the organisation in which bribery is never acceptable.
   
   (b) They should take steps to ensure that the organisation’s policy to operate without bribery is clearly communicated to all levels of management, the workforce and any relevant external actors.
   
   
3. Due Diligence
   
   The commercial organisation should have due diligence polices and procedures which cover all parties to a business relationship, including the organisation’s supply chain, agents and intermediaries, all forms of joint venture and similar relationships and all markets in which the commercial organisation does business.
   
   
4. Clear, Practical and Accessible Policies and Procedures
   
   The commercial organisation’s policies and procedures to prevent bribery being committed on its behalf should be clear, practical, accessible and enforceable. Policies and procedures should take account of the roles of the whole work force from the owners or board of directors to all employees, and all people and entities over which the commercial organisation has control.
   
   
5. Effective implementation
   
   The commercial organisation should effectively implement its anti-bribery policies and procedures and ensures they are embedded throughout the organisation. This process should ensure that the development of polices and procedures reflects the practical business issues that an organisation’s management and workforce face when seeking to conduct business without bribery.  
   
   
6. Monitoring and review
   
   The commercial organisation should institute monitoring and review mechanisms to ensure compliance with relevant policies and procedures and identifies any issues as they arise. The organisation should implement improvements where appropriate.

The MoJ has now launched a consultation on the draft Guidance, which will be open until 8 November 2010.  The MoJ will also be holding a number of open discussion seminars across the UK to further encourage the sharing of views on the form and content of the proposed guidance.

For more information on the new Bribery Act 2010 please click here or contact Robin Corbett or Douglas McLachlan.