The new Bribery Act 2010 (the Act) comes into force in April, and is causing quite a stir in some business circles and it’s not only because of the implications for corporate hospitality. With its tougher penalties for organisations and individuals, along with a new offence ‘failure to prevent bribery’, it’s vital that organisations have all the necessary procedures in place before the Bribery Act is implemented.

There are two general offences within the Act – active bribery where a person or organisation offers, promises or gives a bribe and passive bribery, where a person or organisation requests, agrees to receive or accepts a bribe. The Act also raises the penalties for bribery, with the maximum sentence going up from seven to 10 years in the case of an individual, while a corporate body will be subject to an unlimited fine.

Organisations and individuals operating abroad also need to pay heed to this new Act, as its jurisdiction extends beyond the UK’s borders, enabling the prosecution of British nationals and UK corporate bodies who commit bribery abroad. This includes attempting to bribe or bribing a foreign public official to gain or retain business or an advantage as a result.

This ‘failure to prevent bribery’ is arguably the most controversial aspect of the new Act. It is of particular interest to DMA members as it applies to commercial organisations and partnerships. Up until now, unless senior management was involved in a bribery incident the corporate body itself wasn’t held responsible for the offence. Under section 7 of the Act a commercial organisation will be liable to prosecution if a person associated with it is involved in bribery. It will require organisations to ensure that staff, contractors and agents comply with the new law as well as subsidiaries and other organisations within the group structure.

There is a defence if the organisation can prove that it had in place adequate procedures designed to prevent staff, contractors, agents and subsidiaries from bribing on its behalf. It will be for the defendant to prove on the balance of probabilities that the defence applies.

The Government is expected to publish the final version of guidance about procedures that commercial organisations can put in place to prevent bribery by persons associated with them shortly, following a consultation exercise last year. The draft guidance issued as part of the consultation process is available from here

Organisations should also ensure that they have clear practical and accessible policies and procedures covering all relevant risks in their staff handbooks. They should also tell staff and agents of such policies and procedures in these areas prior to the implementation of the Act.

The DMA will keep members updated of developments, particularly when the final version of the Section 9 guidance is published.

Find out more from James Milligan at the DMA, james.milligan@dma.org.uk, 020 7291 3360

Click here to read the DMA’s full summary of The Bribery Act 2010.