The long-awaited guidance on the UK Bribery Act was finally published by the Ministry of Justice on 30 March 2011.
And…Yes. It was worth the wait.
Of course there are still unanswered questions, but the 44-page document is a significant improvement on the draft guidance (published last September) and provides a very good basis from which to prepare for the implementation of the Act on 1 July 2011.
At the heart of the document is a recognition that ‘adequate’ means ‘proportionate’ in terms of a company’s anti-bribery procedures. Companies are therefore encouraged to take a risk-based approach when they are implementing ‘adequate procedures to prevent bribery’.
Six key principles are outlined by the Government as a guide for businesses:
•Top level commitment
•Communication (including training)
•Monitoring and review
In addition, a number of specific issues are also explored:
Scope of the Act
The Act applies to:
•Offences are committed in the UK
•Offences committed outside the UK where the person has a close connection with the UK (e.g. British nationals/residents or companies carrying on business in the UK)
While the Government stresses that the application of the Act will be a matter for the UK courts, they suggest that organisations without a “demonstrable business presence” in the UK will not be caught. So, a listing on a UK stock exchange will not, in itself, constitute carrying on business in the UK.
Gifts and Hospitality
Wimbledon, Twickenham and the Grand Prix all get a mention as the Government seeks to draw a line between “bona fide hospitality…to improve the image of a commercial organisation, better present products and services, or establish cordial relations,” and bribery.
The guidance contains a number of useful examples to demonstrate what might constitute reasonable and proportionate hospitality.
Facilitation payments remain illegal. However, the guidance recognise that some facilitation payments are more akin to extortion (e.g. where life, limb or liberty are at stake) and stresses that the defence of duress is very likely to be available in such circumstances.
It also supports the recent guidance issued by the SFO (which highlights that isolated incidents are unlikely to be prosecuted if the organisation as a whole is taking a pro-active approach to stamp out such payments).
Organisations may be liable for bribes paid by associated persons on their behalf. The term ‘associated person’ is defined broadly as anyone who performs services for the organisation.
The guidance recognises that long chains of suppliers or contractors pose a particular difficulty in relation to this offence and, indeed, organisations may not even know the identity of those further down the chain. It suggests that risk based due diligence and contractual provisions will go a long way towards managing the bribery risks.
The Guidance highlights that a company will not be liable for the acts of a joint venture merely through having an ownership interest.
The Ministry of Justice Guidance (which can be found here) along with the DPO/SFO Guidance (which can be found here) are both pragmatic documents that take a common sense approach to the issue of bribery.
While grey areas still remain, there is no doubt that the Government has listened to the concerns from businesses. Stating the intention of the guidance, Kenneth Clarke commented, “I hope this guidance shows that combating the risks of bribery is largely about common sense, not burdensome procedures.”
The clock is now ticking – organisations have three months before the Bribery Act comes into force on 1 July 2011.