THE implementation of the Bribery Act into UK law was not a smooth transition. While the Act received Royal Assent on April 8, 2010, it did not come into force until July 1 last year after three false starts.
It was telling that while the act did not come into force in October 2010 or April 2011 as planned, the Ministry of Justice guidance was not issued until 30 March 2011. The style of drafting for the guidance follows the style adopted for much of the guidance issued by government in relation to regulatory issues and is very much along the lines of “don’t panic, not much will change as a result of this Act”.
Essentially, the Act is a piece of codification legislation reiterating that bribery is illegal. There are some trendy new terms such as giving a bribe is now “active bribery” and receiving a bribe becomes “passive bribery”.
However, the element of failure of a new corporate body to prevent bribery is new and is the element that has businesses most concerned because it is has a very wide remit. As a result of the new “section seven”, issues like corporate entertaining, the behaviour of associated persons (including agents and overseas workers) can now all be caught by the act. The Ministry of Justice guidance suggests that all responsible businesses ought to have some form of compliance and while the wording of the guidance is intended to reassure, the fact that the guidance suggests that even micro businesses must verbally train staff once or twice a year, means that the Government wants UK businesses to take compliance very seriously.
The more detailed Ministry of Justice guidance indicates that there are six major principles that businesses must follow to ensure compliance. Each principle is given an entire chapter in the more detailed guidance note, again demonstrating the levels of compliance expected. Paraphrasing some of the guidance, it is clear that all businesses will need to be aware of the Act. Smaller businesses can get away with verbal briefing to staff but larger multi-nationals and plcs will have to have written procedures in place to deal with compliance.
One area which will become key during the Olympics and Jubilee Year will be due diligence. Businesses are expected to carry out a risk assessment of the markets and the type of business conducted.
If a lot of business is conducted through third party agents, particularly overseas, the business will be expected to ensure they are compliant with the Bribery Act.
A great deal of corporate entertaining and hospitality businesses in the UK (risk areas in themselves under the Act) will be conducting sales through ticket agents and third parties. Businesses will therefore have to ensure that the agent has been properly identified and that he or she is familiar with his obligations under the Act. Given the scale of tourism expected in 2012, this could place another burden on UK businesses just as we begin to emerge from the economic slowdown.
:: Neil Warwick is a partner at Dickinson Dees, the region’s top ranked law firm.