Employment: New criminal offences to counter corporate corruption

Estimated reading time 3 minutes

On 8 April 2010 the Bribery Bill received Royal Assent. No date has yet been set for the new Act to come into force, however it represents a complete overhaul of corporate obligations in relation to bribery and corruption.  The maximum penalty for offences under the Act is 10 years’ imprisonment or an unlimited fine

The Act defines a number of new general bribery offences to replace the existing common law offences. Broadly, the new offences are:

• promising or offering a “financial advantage”;
• requesting or accepting a bribe;
• bribing a foreign public official; and
• failure to prevent bribery (as a corporate offence).

The Act provides that a relevant commercial organisation will be guilty of an offence if a person associated with that commercial organisation bribes another person, intending to obtain or retain business or a business advantage for the commercial organisation.

The basic definition of a “bribe” is offering or giving financial advantage to another person either:

• with the intention that the advantage will induce a person to improperly perform a relevant function or activity or to reward them for improperly performing such function or activity; or

• knowing or believing that acceptance of the advantage itself constitutes the improper performance of a relevant function or activity.

There is also specific provision relating to the bribery of foreign officials and acts done abroad will be liable to prosecution under the Act if the person doing them is a British national, is ordinarily resident in the UK or is a body incorporated in the UK.

“Relevant commercial organisation” extends not only to corporate bodies carrying on a business or trade but also partnerships.  A “person associated” includes not only employees but also agents or subsidiaries performing services for or on behalf of the relevant commercial organisation.

Provisions also apply to extend offences to “senior officers” as well as the relevant commercial organisation in circumstances where an offence has been committed with the knowledge or assistance of that senior person.

A defence is available if the relevant commercial organisation can show that it had “adequate procedures” in place to prevent such bribery offences from being committed.  However, there is no definition of what constitutes an “adequate procedure” and as yet no guidance is available.

Under the Act, the Secretary of State is obliged to issue such guidance and the Government has indicated that this will be forthcoming shortly.

Commentary

Whether the Act will be brought into force and guidance issued by the Secretary of State before the General Election is not clear, however, the Conservative party has indicated that it supports the Bribery Act, commenting that “we, like many others, want to see an effective Bribery Bill in place by the election and we will do our best to make this happen”.

Whichever party wins the next election, it seems that the Bribery Act is here to stay and employers should now be carefully considering policies and procedures to put into place to ensure they have a robust defence in the event that they find themselves inadvertently caught on the bribery hook through the actions of associated third parties.

Resources

Bribery Act 2010

Explanatory notes

CBI Parliamentary Briefing 9 December 2009

For further information or to discuss the issues raised, please contact Colina Greenway (colina.greenway@abbisscadres.com) on +44 (0) 203 051 5711.