The Bribery Act 2010 Rosa Fernandez Senior Solicitor Employment - - PowerPoint PPT Presentation

The Bribery Act 2010

Rosa Fernandez Senior Solicitor Employment and HR Services Team Hugh James www.hughjames.com

Why did we need a Bribery Act?

• Existing law inconsistent with the OECD

(Organisation for Economic Co-operation and Development) Bribery Convention, which UK ratified in 1998

• OECD heavily criticised the judicial handling of

the investigation into bribery allegations against BAE systems

Commencement

• The Bribery Act (“BA”) received Royal Assent on

8 April 2010

• On 20 July 2010, the government announced the

BA would come into force in April 2011

• On 31 January 2011 the Justice Minister

announced that the BA would not come into force until 3 months after the Guidance is published

• Watch this space!

What is Bribery?

• Defined in the BA 2010 as a “financial or other

advantage” offered, promised or given to induce a person to perform a relevant function of activity improperly, or to reward them for doing so (section 1)

Offences under the Bribery Act

• The BA introduces 4 new criminal offences:
• Bribing another (section 1)
• Being bribed (section 2)
• Bribing a foreign public official (section 4)
• Failure of a commercial organisation to prevent

bribery by an “associated person” for its benefit (section 7)

The Key Concepts

• Advantage – financial or otherwise
• Improper performance
• Relevant function or activity
• Associated person
• Adequate procedures

s.1 Bribing another person

• Offering, promising or giving an advantage to

someone either:

• Where you intend to bring about an improper

performance of a relevant function or activity, or to reward improper performance (s.1(2))

• Where you know or believe that the acceptance
• f the advantage offered, promised or given, in

itself constitutes the improper performance of a relevant function or activity (s.1(3))

Relevant function or activity

• Includes:
• Functions of a public nature
• Activities connected with a business
• Activity performed in the course of a person’s

employment

• Activity performed by or on behalf of a body of

persons

Who is an “associated person”?

• “Associated person” is (widely) defined in section

8 of the BA

• Assumption that all employees will be associated

persons

• Covers those who perform services for, or on

behalf of, the employer e.g. agents, subsidiaries, consultants, agency workers, volunteers, etc.

Penalties

• Consequences of a breach of the BA are severe
• Individuals face up to 10 years’ imprisonment
• Commercial organisations can be fined an

unlimited amount and prevented from tending for public contracts

Authority to Prosecute?

• The Director of Public Prosecutions
• The Director of the Serious Fraud Office
• The Director of Revenue and Customs

Prosecutions

The “adequate procedures” defence

• Under section 7(2) an employer has a defence if

it can show that it had in place “adequate procedures” designed to prevent bribery.

• No definition of what constitutes “adequate

procedures”.

Draft guidance

• The draft guidance sets out 6 key principles

intended to give commercial organisations a starting point for planning, implementing, monitoring & reviewing their anti-corruption and bribery procedures

• The final version of the guidance was expected

to be published in January 2011 – but still waiting!

The 6 Key Principles

• Principle 1: Risk Assessment
• Principle 2: Top Level Commitment
• Principle 3: Due Diligence
• Principle 4: Clear, practical and accessible

policies and procedures

• Principle 5: Effective Implementation
• Principle 6: Monitoring and Review

Key Issues for Employers

• Recruitment
• Background checks & vetting
• Careful documentation
• Training

Key Issues for Employers

• Expenses
• Audit expenses processes regularly
• Evidence how and why money has been spent

for each expense claim submitted

Key Issues for Employers

• Gifts and Hospitality
• Policy with clear guidance on both the giving and

receiving of gifts

• Procedures on making political or charitable

donations and sponsorships

Key Issues for Employers

• Disciplinary Procedures
• Amend disciplinary rules and policies to make it

clear that breach of anti-corruption and bribery policy and related procedures may amount to gross misconduct

Key Issues for Employers

• Contractual requirements
• Specific contractual requirement to

comply with procedures if:

• Carrying on business in high-risk sectors
• Senior or external-facing workers over

which employer has minimal control

Key Issues for Employers

• Bonus & Commission Schemes
• Ensure they do not unintentionally encourage

employees to ignore bribery and corruption risks

• Credit not to be given where bribery suspected

Key Issues for Employers

• Whistle-blowing Policies
• Comprehensive and up to date policy
• Made available to all workers to whom the anti-

corruption and bribery policy applies

Key Issues for Employers

• Investigating a concern
• Employers must investigate and document every

incident of a suspected breach

• Consider who should carry out the investigation
• Consider whether suspension is appropriate
• Steps needed to ensure confidentiality
• Obligation to report concerns to external

regulators or governing bodies

Key Issues for Employers

• Discrimination issues
• Ensure policies and procedures are not

developed based on racial stereotyping of certain nationalities

• Risk assessments of the risks of bribery in the

relevant regions – The Transparency International Corruption Perceptions Index

Grey Areas

• Corporate hospitality
• Foreign offset arrangements
• Facilitation payments

Other Guidance

• Transparency International

“Business Principles for Countering Bribery”

http://www.transparency.org/content/download/43008/687420/

Questions?

Rosa Fernandez Senior Solicitor Employment and HR Services Team Hugh James www.hughjames.com