Jul 4, 2012

The Bribary Act 2010

How it is effecting UK Business.

The Bribery Act 2010 came into force on 1 July 2011 

It created a new offence under section 7 which can be committed by commercial organisations if they fail to prevent persons associated with them from bribing another person on their behalf. Such organisations may be able to provide a defence to section 7 if they are able to show that they have adequate procedures in place to prevent persons associated with them from giving or receiving bribes. While the Act does not define what these adequate procedures should be, there is a guidance document published by the government on what these adequate procedures may be.

The Bribery Act 2010 applies to all companies that do business in the UK, whether or not incorporated in the UK. It is particularly relevant to companies that do business globally, with large international companies, public authorities or work in a high corruption industry. Companies are expected to develop anti-bribery policies and compliance procedures depending on the size of their business, sectors they operate in and the risks they may be exposed to. It is not enough for companies to develop and implement policies and procedures in relation to the Bribery Act 2010, but also to communicate and regularly monitor compliance. Most of all, it is extremely important that senior management in the company must be committed to mitigating bribery risks.

The first conviction under section 2 the Bribery Act 2010 was in October 2011 when a former court worker pleaded guilty to requesting and receiving a bribe of £500 to perform his function improperly. 

Munir Patel worked as a magistrates' court administrative officer and pleaded guilty to bribery and misconduct in public office. He admitted to accepting a bribe in connection with a speeding charge and was originally sentenced to a total of six years imprisonment, including three years for bribery.

Soon after the Bribery Act 2010 was introduced, the Financial Services Authority imposed the largest fine so far of £6.9 million to Insurance Broker, Willis for failing in its anti-bribery and anti-corruption systems. Willis had made payments of up to £27 million between 2005 and 2009 to third parties based overseas without sufficiently assessing risks in high risk jurisdictions. Further, it also failed to monitor whether staff working in international markets were following written policies and procedures. There was however no findings of bribery in this case. In future, a company found guilty of the same offence may face more than just a regulatory fine as under the Bribery Act 2010, failure to prevent bribery could lead to not only unlimited fines but also a criminal prosecution.