The Bribery Act 2010, which comes into force on 1st July 2011, puts the onus on businesses to ensure that they have adequate procedures in place to stop its representatives from bribing another person on behalf of the business.
The rules are intended to tackle corruption and eradicate bribery from business practices, for example when trying to exert influence when bidding for contracts.
Four new distinct criminal offences will be created:
- bribing another
- being bribed
- bribing a foreign official
- significantly (for commercial organisations), failing to prevent bribery.
On 31st March 2011, the Ministry of Justice published guidance, and a ‘quick start guide’ on its website.
In response to concerns raised by many business organisations in advance of the Act’s implementation, the guidance makes it clear that the authorities will take a proportionate approach when enforcing the terms of the Act.
So, what should small business owners be aware of?
Bribery Act – Key points for small businesses
- Corporate hospitality will not be affected by the new rules, as long as it is reasonable and proportionate (and not acting as a cover for a bribe).
- Significantly, ‘facilitation’ payments are not excluded by the regulations. These occur when payment is made to officials for performing routine functions which they were obligated to perform in any case.
- There is no need for extensive written documentation or policies for the most small businesses.
- Businesses should be able to show that they have taken adequate steps to prevent acts of bribery from taking place involving employees. This can be used as a strong defence in the event of any bribery claims being made.
- To determine how adequate these procedures are will depend on to how open your business is to potential acts of bribery. This may range from a simple mention of the Bribery Act to staff, to detailed new procedures if you are doing business in certain countries.
- It is likely that the courts will ultimately decide how the Act will apply to the actions of foreign companies.