In March 2009, the U.K. government published a draft Bribery Bill which places greater accountability on individuals and corporations registered or carrying out business in the U.K. to prevent bribery by their employees or agents. If bribery and corruption does occur, corporations should be penalized and criminally prosecuted, if management fails to demonstrate that adequate anti-bribery risks, processes and controls have been identified and implemented. Penalties are severe and include unlimited fines or imprisonment for up to 10 years. In addition, the bill will enable courts and prosecutors to respond in a more robust manner to bribery in the U.K. and abroad.
Below are some of the questions that companies should be seeking to address:
- Can your company distinguish gifts, hospitality and goodwill gestures from bribes? Would you know when a goodwill gesture could become interpreted as a bribe?
- Are your company’s officers aware of their personal statutory liability of a bribery offence that has taken place in their company or on behalf of their company?
- Is the board taking tangible measures to prevent, detect investigate and report bribery? Has it made a clear statement on this?
- Do your existing policies make a clear statement on bribery and corruption?
- Are your corporate governance and compliance procedures up-to-date and would they cover the additional requirements to ensure fulfillment of Serious Fraud Office (SFO) expectations?
- Do you have adequate levels of controls over the activities of employees, agents and third parties? Are such activities properly evaluated?
- Do you have the measures in place needed to identify, prevent and investigate bribery? If so, how are these tested for effectiveness and compliance with minimum standards?
- Do you have suitable awareness training in place for your employees and agents?
The Bribery Bill is likely to have a major impact on the way that companies operate. It is also relevant to companies with supply chains overseas where there is a presence of an intermediary, agent joint venture partner and other business relationships. The bill brings the U.K. into line with the Organisation for Economic Co-operation and Development’s (OCED) recommendations in dealing with bribery and corruption. The bill is expected to be enacted during 2010.
The information in this article is based on the Bribery Bill as it currently stands. Issues related to corporate hospitality, facilitation payments and offset arrangements have been raised by industry and such activities will be limited by the “improper performance” test and subject to prosecutorial discretion. The U.K. government has indicated that it will publish guidance on these issues.
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