Public Consultation taking place now on the Bribery Act 2010
(the biggest shake up in UK anti-corruption laws for a century)
In April 2010, the UK Government enacted the Bribery Act 2010 (the “Act”). The Act is due to come into force in April 2011. The Act will change the way business is conducted in the UK and all over the world. The aim of the Act is to stamp out bribery as a means of obtaining advantages in business. It is one of the most far-reaching prices of legislation ever enacted by a UK government. It will impact on every business in every sector.
Why is the law changing?
On 16 October 2008 the OECD (Organisation for Economic Co-operation and Development) criticised the UK for failing to comply with its international obligations under the 1997 OECD Anti-Bribery Convention to prevent bribery and corruption. The criticism by the OECD’s Working Group on Bribery followed a number of international corruption investigations involving or associated with British companies, including allegations involving the activities of BAE Systems plc (“BAE”) in Tanzania, Saudi Arabia, South Africa, Hungary and the Czech Republic.
In one instance, BAE was accused of selling a radar defence system to the Tanzania Government in 1999 that it did not need. BAE admitted that it had made “commission payments to a marketing adviser and failed to accurately record such payments in its accounting records.” It took until 5 February 2010 for the UK and US authorities to reach a ‘settlement’ with BAE, on terms that BAE would admit criminal liability and pay a £30 million fine in the UK. Following this, BAE was then ordered by the US Courts on 4 March 2010 to pay a $400 million fine.
Currently, the UK’s law on bribery stems from a number of sources: the common law (the body of law developed by Courts over time), the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906, the Prevention of Corruption Act 1916 and (to prevent bribery by UK companies or citizens abroad) the Anti-Terrorism, Crime and Security Act 2001.
The net result is that the law is out-dated, confusing and inconsistent, and out of line with the UK’s international counterparts.
The Bribery Act 2010
The Act consolidates and extends the existing laws on bribery, defining four categories of offence.
- Bribing: the offering, promising or giving of a financial or other advantage to another person (whether in the public or private sector) in return for the improper performance of a function.
- Being bribed: requesting, agreeing to receive or accepting a financial or other advantage in return for the improper performance of a function.
- Bribing a foreign public official.
- The ‘corporate offence’ of a commercial organisation failing to prevent ‘associated’ individuals or organisations (for example, employees, agents and subsidiaries) from committing any bribery offence.
The entirely new fourth category of offence places a legal obligation on commercial organisations to enforce a ‘zero tolerance’ attitude towards bribery, and put in place adequate procedures to prevent bribery. The Secretary of State is due to issue Guidance these procedures before the Act can come into force.
Public consultation on the Guidance until 8 November 2010
The Ministry of Justice is currently carrying out a public Consultation (which closes on 8 November 2010) on the proposed statutory on Guidance as to the anti-bribery procedures for commercial organisations.
Feedback on the Consultation will be accepted by post or email, or by completion of the online consultation questionnaire (see the External Links listed below).
We will be contributing to the Consultation process, and will report on progress in relation to the consultation, the Guidance and the implementation of the Act, in due course.
We are currently working to develop the necessary policies and procedures for our clients to ensure they comply with the Act when comes into force next year.
How we can help
If you have any questions, or you wish us to assist you with any matter in relation to the Act (including responding to the Consultation), please contact:
- John Greager (Dispute Resolution) on 020 7317 6796 or [email protected]
- Adele Martins (Employment) on 020 7317 6719 or [email protected]
- David Little (Company-Commercial) on 020 7317 6728 or [email protected]
- Bribery Act 2010
- Bribery Act 2010 – Explanatory Notes
- Link to UK Ministry of Justice Website – Consultation on Bribery Act 2010
- Consultation on guidance about commercial organisations preventing bribery (section 9 of the Bribery Act 2010) (PDF 0.51mb 35 pages)
- Consultation questionnaire (Word 0.08mb 3 pages)
- Online consultation questionnaire
- Impact assessment on Guidance about commercial organisations preventing bribery (Section 9 of the Bribery Act 2010) (PDF 0.10mb 10 pages)