By Claire West
Small Business owner-managers are warned they could face up to 10 years in prison and an unlimited fine if someone within, or even associated with their business is convicted of bribery and they failed to take steps to prevent it.
That’s according to the experts at law firm Temple Bright who say SME company directors need to take measures now to prevent corruption in their businesses ahead of the new Bribery Act 2010 becoming law next April.
Richard Norwood, partner at Temple Bright which specialises in offering legal services to the SME sector, said: “Bribery has happened for as long as there has been business but, until now, there has been no consistent regulation of this area.
“What the Government is introducing is a new offence whereby the prosecution of a company for bribery will no longer require proof of dishonest or corrupt intent by the defending business.
“Indeed even if the person guilty of bribery was only associated with a business, and not even a full employee, the company’s management could still face prosecution.”
Mr Norwood said that prosecution under the new rules will carry a maximum 10-year prison sentence and an unlimited fine — even if company bosses could prove they knew nothing about the offence.
“ Under the provisions of the new Act companies may still be liable even if not a single member of senior management was aware that an offence was being committed and even if the company had done nothing to encourage the bribe.
“In essence the offence requires companies to implement, maintain and enforce effective anti-bribery and anti-corruption procedures and policies and to review them regularly.
“Then, if an accusation of bribery is made, corporate criminal liability should be avoided if employees and business associates have been made aware of the company’s anti-bribery policies, although ultimately it will be the courts who decide whether or not those procedures were adequate.”
Mr Norwood said the Government would issue official guidance on what constitutes “adequate procedures” in January 2011 but added companies would do well to start drafting their own policies now.
He added: “Those policies should include sections on risk assessment, due diligence (especially in third party dealings) and looking at how to foster a corporate culture where corruption and bribery is unacceptable.”