Bribery is not a new offence in the UK and in many respects the Act simply consolidates and modernises existing laws.

However, the Act has cast wide the bribery ‘net’ and introduced an important new corporate offence of failure by a commercial organisation to prevent bribery, which will make it far easier for the Crown Prosecution Service/Serious Fraud Office to bring successful prosecutions. The only defence to the new offence is having in place “adequate procedures” which we will discuss later.

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A commercial organisation carrying on business in the UK could be found guilty of an offence if a person associated with it bribes another person with the aim of obtaining or retaining business or a business advantage for the organisation and the organisation has not done anything to prevent this. It does not matter where the act of bribery takes place, at home or abroad and there is no requirement for the organisation to have acted corruptly.

An ‘associated person’ will be anybody who performs services on behalf of your organisation. This will potentially cover anybody, the important thing is what they are doing on your behalf rather than what their title is. Employees, agents and consultants will clearly be associated persons, but less obviously, so could intermediaries and joint venture partners for example.

Consequently, as well as the general offences of giving and receiving bribes it may be possible for you to commit an offence by effectively doing nothing other than acquiescing in the acts of other people.

Senior Officers of a commercial organisation (which is not limited to directors or managers, but again casts a much wider net) could now also be found guilty of an offence if they consent or connive in the organisation bribing or being bribed, although it is too early to say what will amount to consent or conniving in this context.

Another consequence of failing to prevent bribery is that if you are found to be guilty of an offence you could be debarred from tendering for public contracts in the future. Debarment will be discretionary rather than mandatory.

A lot of the press attention has focussed on the notion that corporate hospitality is going to be outlawed as a result of the Act. It is true that commercial organisations need to take a closer look at their corporate hospitality practices, however, guidance published under the Act makes it clear that the vast majority of corporate hospitality is likely to be unaffected.

If the reason for your hospitality is to improve business relations or to get yourself known in the market, so long as what you do is proportionate and reasonable, it is unlikely to be a problem.

For example, inviting business colleagues to a rugby match and then to dinner may well be fine. However, if the colleagues you are inviting are on the decision making panel at the end stage of a tender process where you have submitted a tender, then your motives will be open to scrutiny under the Act.

Remember that the business colleagues you offer hospitality to will also be subject to the Act and may, therefore, be assessing the appropriateness of the invite themselves.

Bribery of a foreign public official is not a new offence, but something that has now been clarified under the Act is that “facilitation” payments, that is, payments to expedite typically “red tape” type procedures are illegal, the fact that they are permitted or expected by local law or custom in the country where the payment is made is no defence, you could still be prosecuted in the UK. The only exception to this is if the written laws of the country permit facilitation payments, which is likely to be a limited defence.

The penalties are more severe under the Act; this is a zero tolerance piece of legislation. Commercial organisations can be subject to an unlimited fine and individuals up to 10 years imprisonment and/or an unlimited fine. Directors may be disqualified from holding a director position for up to 15 years.

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Whether you are a large organisation needing to put in place formal policies and procedures or a smaller organisation where an informal approach may be adequate, by having the correct procedures in place you can minimise your risk of falling foul of the Act.

Click here to see how Geldards can help you put these processes in place and ensure you stay on the right side of the law.

Please contact Rhian below if you have any questions:

Rhian Brace Partner 02920 391 734 email