* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Robert Amaee is Head of Anti-Corruption, Proceeds of Crime & International Assistance at Britain’s Serious Fraud Office (SFO)
Many companies and professional advisers are now aware that the Bribery Act 2010 is to come into force in April 2011. While there has been some understandable concern expressed at the delayed implementation of the Act, the SFO welcomes the opportunity it provides for businesses to digest the significant implications of this piece of legislation and to take any necessary remedial action. It is no exaggeration to suggest that the implementation of the Act will cause a revolution in the way bribery issues are dealt with at board level both within UK businesses and foreign companies with UK operations.
The SFO is the UK’s principal enforcement agency for overseas bribery and we hold the UK’s Anti-Corruption Register which catalogues all allegations of British entities paying bribes overseas. We maintain it, update and share it with our law enforcement partners and work with our partners to decide who investigates a particular matter. The SFO is also the lead agency charged with enforcing the provisions of the Act when it comes into force.
The new Act overcomes many of the obstacles that currently hinder the prosecution of corporate bribery. Under current legislation, the SFO in effect has to prove that a company’s controlling mind knew what was going on. In practice, the controlling mind is typically someone at or very close to board level. This is difficult to prove, especially in global companies where much of the decision making is devolved away from the board. Section 7 of the new Act sweeps away the concept of the controlling mind and introduces the corporate offence of failure to prevent bribery, a novel concept under English law. A commercial organisation will become criminally liable if an employee, agent or a subsidiary bribes another, intending to retain or obtain business or an advantage in the conduct of business for the organisation. This is a much more readily enforceable piece of legislation and will make our task at the SFO of enforcing the Act significantly more straightforward.
The new Act also extends our jurisdictional reach. Under Section 7(5) the corporate offence may be committed by a company wherever it is incorporated which carries on a business or part of the business in the UK and by virtue of Section 12 (7) the corporate offence can be committed irrespective of whether the acts or omissions which form part of the offence take place in the UK or elsewhere. In practice, a company registered anywhere in the world and having part of its business in the UK could be prosecuted for failing to prevent bribery on its behalf wherever in the world that bribe was paid. These changes are very significant additions to the SFO’s powers.
There is some comfort for business though, in the form of a defence under section 7. If a company can prove, on the balance of probabilities, that adequate procedures were in place to prevent persons associated with the company from paying bribes, the company will not be liable. While the Act does not define what constitutes adequate procedures, the Government is required by the Act to issue guidance on the procedures companies can put in place to prevent bribes being paid on their behalf and is committed to issuing the guidance before the Act comes into force allowing companies sufficient time to digest it and act upon it where necessary.
Businesses would however be well advised to start reviewing their anti-bribery procedures right now and to seek to address any areas of weakness they identify. Professional advisers will be able to assist businesses and there is also a raft of helpful and informative advice from organisations such as the OECD and TI among others which businesses can draw upon. What is clear though is that much of the guidance available today draws on simple common sense.
We have been asked by concerned directors on a number of occasions questions such as “Where should I focus my due diligence? How far down the chain does my liability go under the new Act?” While forthcoming guidance may provide some assistance, the directors of a company are clearly better placed than the Government or any prosecutor to answer these questions and identify where the risks lie for their particular business. A supply chain in one country may present bigger risks for their company than the same type of supply chain in another country. It is a matter for the directors to assess how much resource needs to be placed into vetting one particular supply chain as opposed to another.
Commercial organisations should also familiarise themselves with other significant provisions of the act including the wide-ranging offence under section 6 (bribery of foreign public officials) and the potential for personal liability for senior officers or persons of a body corporate created by section 14 of the Act.
The SFO and professional advisers can offer guidance to commercial organisations but in the end it is for the directors of a company to devise and more importantly to put into practice robust anti-bribery measures to ensure that they live up to their own high ethical standards. Under the Act, the buck undoubtedly stops with them.
