The Government has today published its long-awaited guidance on the Bribery Act 2010.
The UK Bribery Act 2010 ("the Act") reforms criminal law and introduces a new strict liability offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf has been created, for which there is a defence of having in place adequate policies and procedures to prevent bribery. The guidance aims to give commercial organisations a steer as to how they ought to be working to prevent bribery and what the Serious Fraud Office will expect them to have done to be compliant with the law. As the Act will be extraterritorial and carry criminal sanctions, it will have far-reaching implications for UK businesses and multinationals operating in the UK. The Act will come into force on 1 July 2011
Regulatory compliance lawyer Rachel Cropper-Mawer said: "The scope of the jurisdiction of the Act has not been significantly narrowed by the guidance. The guidance confirms that any organisation doing business in the UK will be captured by the Act for any acts of bribery committed anywhere in the world by it or anyone associated with it. The message from the SFO and the guidance is that companies need to be mindful that the Courts will ultimately decided the jurisdictional scope.
As to the definition of "associated person" the guidance advises that definition goes beyond employees, agents and subsidiaries to include suppliers and joint ventures. It advises that a commercial organisation will be responsible for the activities carried out on its behalf by suppliers but limits this to, for instance, the main contractor where there is a main contractor and a number of sub-contractors. In relation to Joint Ventures, where the joint venture is a separate legal entity it is less likely to be seen as an associated party to any commercial organisation involved in the joint venture. If it is a contractual joint venture then the degree of control over that joint venture will need to be considered.
The good news is that the guidance says that any prosecutions in relation to hospitality, promotional expenditure and facilitation payments would have to be carefully considered. Hospitality which is commensurate with industry norms is acceptable and the amount of spend will not necessarily be the key issue in considering whether the hospitality was in fact a bribe"
For more information on the Bribery Act 2010, please contact Rachel at +44 (0) 20 7623 1244