The Bribery Act 2010 Rosa Fernandez Senior Solicitor Employment - PowerPoint PPT Presentation

The Bribery Act 2010 Rosa Fernandez Senior Solicitor Employment and HR Services Team Hugh James www.hughjames.com

Why did we need a Bribery Act?  Existing law inconsistent with the OECD (Organisation for Economic Co-operation and Development) Bribery Convention, which UK ratified in 1998  OECD heavily criticised the judicial handling of the investigation into bribery allegations against BAE systems

Commencement  The Bribery Act (“BA”) received Royal Assent on 8 April 2010  On 20 July 2010, the government announced the BA would come into force in April 2011  On 31 January 2011 the Justice Minister announced that the BA would not come into force until 3 months after the Guidance is published  Watch this space!

What is Bribery?  Defined in the BA 2010 as a “financial or other advantage” offered, promised or given to induce a person to perform a relevant function of activity improperly, or to reward them for doing so (section 1)

Offences under the Bribery Act  The BA introduces 4 new criminal offences:  Bribing another (section 1)  Being bribed (section 2)  Bribing a foreign public official (section 4)  Failure of a commercial organisation to prevent bribery by an “associated person” for its benefit (section 7)

The Key Concepts  Advantage – financial or otherwise  Improper performance  Relevant function or activity  Associated person  Adequate procedures

s.1 Bribing another person  Offering, promising or giving an advantage to someone either:  Where you intend to bring about an improper performance of a relevant function or activity, or to reward improper performance (s.1(2))  Where you know or believe that the acceptance of the advantage offered, promised or given, in itself constitutes the improper performance of a relevant function or activity (s.1(3))

Relevant function or activity  Includes:  Functions of a public nature  Activities connected with a business  Activity performed in the course of a person’s employment  Activity performed by or on behalf of a body of persons

Who is an “associated person”?  “Associated person” is (widely) defined in section 8 of the BA  Assumption that all employees will be associated persons  Covers those who perform services for, or on behalf of, the employer e.g. agents, subsidiaries, consultants, agency workers, volunteers, etc.

Penalties  Consequences of a breach of the BA are severe  Individuals face up to 10 years’ imprisonment  Commercial organisations can be fined an unlimited amount and prevented from tending for public contracts

Authority to Prosecute?  The Director of Public Prosecutions  The Director of the Serious Fraud Office  The Director of Revenue and Customs Prosecutions

The “adequate procedures” defence  Under section 7(2) an employer has a defence if it can show that it had in place “adequate procedures” designed to prevent bribery.  No definition of what constitutes “adequate procedures”.

Draft guidance  The draft guidance sets out 6 key principles intended to give commercial organisations a starting point for planning, implementing, monitoring & reviewing their anti-corruption and bribery procedures  The final version of the guidance was expected to be published in January 2011 – but still waiting!

The 6 Key Principles  Principle 1: Risk Assessment  Principle 2: Top Level Commitment  Principle 3: Due Diligence  Principle 4: Clear, practical and accessible policies and procedures  Principle 5: Effective Implementation  Principle 6: Monitoring and Review

Key Issues for Employers  Recruitment  Background checks & vetting  Careful documentation  Training

Key Issues for Employers  Expenses  Audit expenses processes regularly  Evidence how and why money has been spent for each expense claim submitted

Key Issues for Employers  Gifts and Hospitality  Policy with clear guidance on both the giving and receiving of gifts  Procedures on making political or charitable donations and sponsorships

Key Issues for Employers  Disciplinary Procedures  Amend disciplinary rules and policies to make it clear that breach of anti-corruption and bribery policy and related procedures may amount to gross misconduct

Key Issues for Employers  Contractual requirements  Specific contractual requirement to comply with procedures if:  Carrying on business in high-risk sectors  Senior or external-facing workers over which employer has minimal control

Key Issues for Employers  Bonus & Commission Schemes  Ensure they do not unintentionally encourage employees to ignore bribery and corruption risks  Credit not to be given where bribery suspected

Key Issues for Employers  Whistle-blowing Policies  Comprehensive and up to date policy  Made available to all workers to whom the anti- corruption and bribery policy applies

Key Issues for Employers  Investigating a concern  Employers must investigate and document every incident of a suspected breach  Consider who should carry out the investigation  Consider whether suspension is appropriate  Steps needed to ensure confidentiality  Obligation to report concerns to external regulators or governing bodies

Key Issues for Employers  Discrimination issues  Ensure policies and procedures are not developed based on racial stereotyping of certain nationalities  Risk assessments of the risks of bribery in the relevant regions – The Transparency International Corruption Perceptions Index

Grey Areas  Corporate hospitality  Foreign offset arrangements  Facilitation payments

Other Guidance  Transparency International “Business Principles for Countering Bribery” http://www.transparency.org/content/download/43008/687420/

Questions? Rosa Fernandez Senior Solicitor Employment and HR Services Team Hugh James www.hughjames.com