Prevention Better Than Cure
As stated in my previous blog post, the Bribery Act represents a significant change to UK laws in this area of business and commerce. It seeks to enhance the UK’s anti-bribery legislation which was seen as antiquated and fragmented and had been subject to serious criticism internationally.
The Bribery Act replaces previous offences with general, active and passive bribery offences and a specific offence relating to the bribery of foreign public officials (all of which are applicable to individuals and UK-registered companies). It also introduces a specific corporate offence of failing to prevent bribery.
Every business needs to understand its implications for their business and how to become compliant with the bill. Here is some practical compliance advice:
A) Risk Assessments – commercial organisations must routinely and comprehensively assess the bribery risks they face
B) Top level commitment – the most senior levels of management must commit to preventing bribery and communicate this through their organization
C) Due Diligence – all commercial organisations should have, and should execute, due diligence procedures which cover all parties with which they do business
D) Effective Policies and Procedures – commercial organisations must have policies and procedures to prevent bribery which should be clear, practicable, accessible and enforceable
E) Effective Implementation – policies and procedures must be effective and embedded
F) Monitoring and Review – commercial organisations must have mechanisms to monitor and review their programs, which can evolve to meet changing risks
The government has thus far been silent on the issue of successor liability in merger and acquisitions. However, there is clear successor liability under the FCPA and, in our view, the same exposure under the Bribery Act. Companies should therefore undertake anti-bribery due diligence on acquisition or merger targets.
Directors and Board members must show leadership, with training provided throughout an organisation to raise anti-bribery awareness. Numerous functions need to be involved in developing, embedding and maintaining internal anti-bribery programmes, including legal, compliance, internal audit, HR and finance. Mechanisms for support staff, such as compliance helplines and whistleblowing facilities, ought to also be established.
Organisations should not assume that the government and regulators will be deflected from enforcing the new legislation. Recent indications are that corporate and individual failures to take action to prevent bribery will meet a tough response. Notably, law enforcement and regulators are increasingly working together on cross-border investigations and proceedings.
Please Note: This blog post is not intended as a guide to the legal details of the Bribery Act, but as a prompt to encourage companies to take urgent and necessary action.