Are you up to speed on new bribery laws?

Has your organisation provided corporate hospitality or gifts to its customers or suppliers?

Has your organisation ever made any facilitation payments for trade, which may be commonplace in some jurisdictions?

Does your organisation make extensive use of agents or sub-agents to obtain orders?

If the answer to any of the questions is ‘yes’, you need to gen up on the laws introduced by the Bribery Act 2010, which come into force in April 2011.

Oglethorpe, Sturton and Gillibrand’s commercial law expert Andrew Royce examines how the changes could significantly impact on the way certain organisations work.

Any business needs to review whether or not any of its current practices may fall within the meaning of bribery.

In addition, the Bribery Act introduces a new strict liability offence of failing to prevent bribery. This means that organisations need to be aware of the laws and actively train their employees and agents to ensure that no crime of bribery takes place.

The defence to the crime can only be made out if the business has ‘adequate procedures’ in place to prevent the bribery. The scope of the Act is extensive. The offences are broadly defined and it has significant extra-territorial breach.

Personnel should be aware of the four offences created by the Bribery Act.

Perhaps most relevantly organisations need to be aware of the new offence, the failure to prevent bribery, and it will be the case that a commercial organisation commits an offence if a person associated with it bribes another person for that organisation’s benefit.

The Ministry of Justice proposes to publish guidance on what ‘adequate procedures’ might involve. There is currently a consultation procedure being undertaken.

Organisations will need to be aware of and implement that guidance, but it is anticipated that the procedures will be appropriate to sector, size and risks for any particular organisation. As this is a criminal matter, there are significant penalties of imprisonment and fines.

In summary, it is important that organisations adopt actively an anti-corruption and bribery culture. They need to assess the extent to which corporate hospitality, gifts or any other inducements may be regarded as bribery.

They should undertake an audit of practices, particularly in other jurisdictions. Even where such payments are lawful within a local jurisdiction, if they are unlawful under the Bribery Act, a criminal offence is still committed.

The Bribery Act shows a strong commitment by the UK Government to establish anti-corruption laws to maintain ‘the integrity and ethical foundations of all institutions, public and private’. It will be essential going forward that all commercial organisations are aware of it and take necessary action.