Bribery Act 2010: Fact Sheet

Bribery Act 2010 — Changes to the law on bribery and corruption.

Peter Charles Limited's policy and procedures.

The essential policy is a very simple one: Bribery is a criminal offence and is not tolerated within or in association with Peter Charles Limited. This fact sheet is offered to provide up to date information on some important changes in this area of the law which impose new responsibilities on businesses.

Introduction

Before 1 July 2011 if you personally offered/ made or sought/ received a bribe in the United Kingdom you could be prosecuted in the United Kingdom and if convicted jailed for criminal offences under common law and under certain Acts of Parliament.

The Bribery Act has been brought into force on 1 July 2011 to update the law on these issues which have in recent years been seen to fail to effectively prevent bribery and corruption in some parts of British business and public life and in particular in the context of the overseas activities of businesses. Businesses have also been seen to hide behind the fact that usually only an individual can be punished for a criminal offence even if it was committed for or in the context of a business.

What has changed with the coming into force of the Bribery Act 2010 on that 1 July 2010 is:

  • A business can now be prosecuted and punished for bribery or corruption actually committed by another person (this may include directors, staff, consultants, agent);
  • The UK authorities can prosecute a business based or operating in the UK for bribery which actually takes place overseas;
  • New criminal offences:
    • Failure to prevent bribery, (this offence under Section 7 applies to any business);
    • Bribery of an overseas official;
  • The maximum punishments are now:
    • prison sentences of up to 10 years
    • unlimited fines

What is Bribery?

The Act defines 2 general offences, one of offering or making a bribe and the other of seeking or receiving a bribe. A bribe is broadly defined as anything which is or would be a financial or other advantage to a person to encourage that person to perform their functions or activities (whether related to work or business or public office or functions) improperly or to reward that person for having already done so. The Act also creates an offence (Section 7) by which a commercial organisation can be liable where someone associated with it; defined as one who performs services for it — e.g. an employee, consultant, agent or contractor — offers or pays a bribe specifically to get business, keep business, or gain a business advantage for the organisation. A business can now commit the new offence of failing to prevent bribery being undertaken on its behalf.

Defences to the offences

If the facts show that an individual has committed an offence under the Act there are very limited defences related to the security and armed forces on active service. For a business there is a possible defence to the Section 7 offence of failure to prevent bribery. Where a person associated with the business has been found guilty of a bribery offence the business will have to demonstrate that it had in place adequate procedures to prevent persons associated with it committing bribery offences. The standard of proof will be on the balance of probabilities.

Business response to the Bribery Act 2010.

The response of businesses to the Act has been understandably focussed on the new Section 7 offence of failure to prevent bribery and the need to have proper policies and procedures in place. These policies and procedures are aimed at preventing bribery and also where even that fails to deter an individual committing the offence to allow the business to claim a defence to the charge under Section 7 of failure to prevent bribery.

The Ministry of Justice has provided guidance as to what standards it would expect of the policies and procedures each business should have in place to meet the standard required by the Act. Many businesses are therefore currently updating and reissuing their own procedures and requesting proof that advisors, consultants, associates and others that their business is "associated" with, have their own appropriate procedures and policies. The standard required by the Act is "adequate", which will differ according to the size, sector and arrangements of each business.

Peter Charles Limited's policy and procedures.

As set out above the core is a very simple one: Bribery is a criminal offence and is not tolerated within or in association with Peter Charles Limited.

Some of the existing procedures within PCL already go some way towards articulating this policy so that for instance inappropriate expenses and questionable payments for which there is no clear and appropriate value delivered to PCL from the payee will not be approved for payment.

However, this would over simplify the matter and so more detailed exploration of the risks faced by PCL and guidance on matters such as expenses and hospitality are provided in the Integrity Policy and Procedure which is attached.

September 2011