Bribery Act effective from 1 July 2011 - Is your business prepared?

On 1 July the new Bribery Act becomes law. As well as creating the key criminal offences of bribing and being bribed, the Act includes the new offence of failure by a commercial organisation (eg. companies and partnerships etc) to prevent bribery. 

Under the previous law, in order for a company to be successfully prosecuted it was necessary to show that the Board were aware of the situation. From now on this will not be necessary. The Act means that commercial organisations may be guilty of an offence if a person associated with the organisation bribes another person with the intention of obtaining or retaining business for the organisation.

The definitions are all very broad; for example, bribery is not just limited to financial gain but may include gifts, sponsored travel and particularly lavish hospitality, and an associated person can include an employee, agent or joint venture partner. However, there is a defence set out in the Act if the commercial organisation has put in place adequate procedures to prevent bribery.

The rigour of the adequate procedures must be proportionate to both the nature of a business and the sector in which it operates (some are deemed more high risk than others) but all commercial organisations should put in place some form of procedure (covering both internal and external relations) now. The aim is both to try to prevent bribery and also to provide a defence if an issue arises later.  

We can provide guidance on necessary steps and other relevant aspects of the Act. If you have any queries please get in touch with Tim Richards, Partner on tim.richards@michelmores.com

For further information, see also our article The Bribery Act: Six steps businesses should be taking now