Glasses and paperwork on table with Corporate and M&A executives in the background

New bribery act – is your company at risk?

A new Bribery Act has received Royal assent and is likely to come into force on 1 October 2010. It will make it easier for agencies such as the Serious Fraud Office to prosecute bribery and corruption offences. Companies will face unlimited fines if they are convicted and employees and directors face up to 10 years in prison.

The Act introduces general offences of:

  • promising or offering a bribe
  • requesting, agreeing to receive or accepting a bribe
  • bribing a foreign public official

Even if the actions in question take place abroad, they will constitute an offence if the person promising or receiving the bribe is a British national or is normally resident in the UK. Companies incorporated in the UK will also be covered.

Companies can be automatically prosecuted if they fail to prevent bribery and will only escape liability if they can show that they had “adequate procedures” in place set up to prevent it. The Secretary of State will provide guidance on what is meant by this in due course. However, for the time being companies should ensure that they do have detailed policies in place which cover gifts, hospitality, facilitation payments, vetting outside agents and advisors, lobbying and political contributions. Proper training will need to be put in place to ensure that staff are aware of what is not acceptable.