A Q&A on the Bribery Act with Jim Evans, Managing Director of the Regulatory Strategy, Risk and Compliance team at Navigant Consulting
What is the Bribery Act?
The Bribery Act is an update of existing UK anti-bribery legislation which was seen as out of date and inadequate. The new act gives a more certain definition of what bribery is, this is because under the old legislation it was hard to obtain a prosecution.
The act introduces a number of new criminal offences. These include;
* Two general offences around offering, promising or providing an advantage and requesting, agreeing or accepting an advantage;
* A separate offence concerning the bribery of a foreign public official;
* A new corporate offence where a firm fails to prevent a bribe done on its behalf;
When is all this happening?
The Bribery Act was passed by Parliament April 2010, but it will not come into force until April 2011.
What are the consequences, intended or otherwise of the more robust regulatory approaches now being adopted?
The key point is that the individual employer of someone engaged in bribery can be held to account for the first time for those acts, even if the company did not condone or even know about it.
Is this really just box-ticking or is it more serious?
It is very serious. Companies will need to understand how the act really affects them. They will need to develop policies and provide training to all staff, not just management. If a company fails to act in the appropriate manner by not having adequate polices, systems and processes then it will be held liable. There will have to be clear and defined principles developed for a company and all of its employees to follow.
What's the worst-case scenario for me and my business?
The failure of a commercial organisation to prevent bribery will face an unlimited fine and individuals could face up to 10 years imprisonment in addition to an unlimited fine. Both the firm and individuals within it may face investigations into their contract procedures preventing them from ever tendering for public contracts and could face a civil recovery order.
What about people further down the supply chain who are out of my control? Will I end up liable for their actions?
In short yes. A company will be held liable if it fails to act and put in place adequate policies, training and monitoring. If an employee accepts a bribe or you, in effect, bribe someone else, then the firm itself will be held liable.
What about coverholding relationships that are arranged via a broker? Does this spell the end of emerging markets business being placed in London?
No, but companies dealing with emerging markets must develop their policies to cover this area and not fall foul of the offence from foreign public official.
Is it true that the new law puts payment of contingent and other additional commissions in jeopardy?
Only if the company fails to set policies, training and monitoring. The firm will need to ensure that payments are not disproportionate to the work completed and that they are recorded.
What about client entertainment?
Companies will need to develop policies and guidelines as to what is acceptable. The firm must monitor its gifts and entertainment and ensure that spending is not disproportionate to the contracts on offer.
Companies will need to train the employees and monitor their spending levels. This will most probably take the form of logs and record keeping.
What if I do nothing?
Companies failing to act will leave themselves exposed to prosecution. If a firm does not develop robust polices, training and monitoring then it will not have a form of defense.
Anything else I should know?
It is vital that companies act on this and ensure they protect themselves before it is too late. Parliament has given a clear lead time to help firms to develop polices and train staff. There will be no excuses.