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Bribery Act 2010 - Employers Need to Take Action

On 1 July 2011 the Bribery Act 2010 came into force. The Act extends the crime of bribery to cover all private sector transactions, as previously only bribery involving public officials and agents were offences, the Act has created a new strict liability offence where commercial organisations have failed to prevent bribery where a bribe has been paid, or received, by an employee, agent and/or other persons connected with an organisation.

The potential consequences for failing to comply with the Act include unlimited fines for companies and individuals, as well as prison sentences of up to 10 years for the latter. However, provided a commercial organisation can show that adequate procedures have been put in place to prevent bribery, this will provide a defence where an employee, agent or other person connected with an organisation has committed an offence under the Act. Therefore, businesses would be well advised to ensure such adequate procedures are in place.

The Ministry of Justice has published guidance on what an adequate procedure may involve. Businesses should conduct a risk assessment in order to establish the extent of their exposure to bribery, as the extent of the procedures, that will be considered to be adequate, will depend upon the extent of the exposure. For example, organisations that are involved in dealings with foreign countries, where there are known to be high levels of corruption, will need to ensure they have particularly stringent procedures in place. Transparency International has published an index which details the levels of corruption in each country. Countries scoring the highest include Iraq, Somalia, Sudan and Afghanistan, with Italy and Greece scoring the highest out of the EU countries, although all countries in the world have been noted to have some level of corruption. Similarly, organisations that are involved in complex projects which include a number of different contractors, such as in the construction industry, will need to have detailed anti-bribery procedures.

However, organisations that do not fall within the high risk categories should not presume they are not at risk, and therefore no procedures at all are required. We have recently conducted seminars on the Act and an example of bribery that is allegedly not uncommon is for persons in the funeral industry to pay individuals within care homes for information relating to the death of residents within the home, so funeral directors can secure work. Such a practice would be an offence under the Act, and this is a useful example of an industry that, although seemingly low-risk, could still fall foul of the Act.

Recommended steps include that businesses shall introduce anti-bribery policies into the workplace, and incorporate anti-bribery provisions into terms of business and any other contracts with third parties. It may be appropriate, when introducing an anti-bribery policy or related terms, and thereafter from time to time, to provide training to staff to ensure they are aware of the provisions of the Act, and the implications of any breach of it. An anti-bribery officer should also be appointed, who should be either someone at board level or a senior employee reporting to the board.

Lanyon Bowdler provide advice and assistance with conducting risk assessments and/or formulating and implementing adequate procedures in respect of the Bribery Act. We are able to provide commercial organisations with an anti-bribery policy, together with guidance on the same, for a fixed fee of £100 plus VAT, and half-day training sessions on the Act for employees at a cost of £500 plus VAT. Please contact Bethan Jones on 01952 291222 or email bethan.jones@lblaw.co.uk for more information.