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Bribery Act 2010

Details of the Bribery Act 2010, including core offences of paying or receiving a bribe; bribery of a foreign public official; corporate offence of failure to prevent bribery; offences by senior officers and enforcement of the Act.

Bribery of foreign public official

An additional specific offence of bribing a foreign public official has been added, to ensure complete implementation of the OECD Convention. 

For this offence to be committed, it is not necessary to show improper performance by the official concerned, but merely that the bribe had been paid to a person in their capacity as an official of a foreign Government or international organisation with the intention to obtain or retain business or business advantage.

Again, no offence is committed, in accordance with foreign written law. 

Core offences of paying or receiving a bribe

The Bribery Act goes back to first principles in addressing the damage caused by bribery, in a clear, logical and effective way. 

UK residents / citizens

Any UK resident or citizen can be guilty of paying or receiving a bribe, whether the recipient is in the public or private sector, whether any part of the transaction takes place in the UK, and whether or not the bribe is paid directly or indirectly. 

Definition of 'bribery'

Bribery is defined in terms of an intention to encourage or induce “improper performance” by any person, in breach of any duty or expectation of trust or impartiality. 

Small bribes are not excluded, any more than pilfering is excluded from the definition of theft, but tips to reward good performance are acceptable, if no improper performance is in question.

Relevant function

A bribe can be paid in relation to any “relevant function” – which could be a function of a public nature; one performed in connection with business or employment; or any activity performed by or on behalf of a body of persons, whether corporate or unincorporated.

Improper performance

Improper performance will be judged in accordance with what a reasonable person in the UK would expect, in relation to the function or activity concerned. This test applies, even if no part of the function or activity took place in the UK, and where local custom is very different unless permitted or required by “written law” in the jurisdiction concerned. 

What is 'written law'?

Written law is that contained in a written constitution, made under any legislation applicable to that country, or contained in a published judicial decision . 

Corporate offence of failure to prevent bribery

Companies and partnerships can themselves commit the criminal offence of failing to prevent bribes being paid on their behalf – punishable by unlimited fines. Again, the offence is widely drawn, with not just bribes paid by employees being in question, but bribes paid by any person who performs services on behalf of the organisation. This is specifically likely to include employees, agents or subsidiaries, but may include any other person.

Adequate procedures

Having “adequate procedures” for the prevention of bribery will be a defence, to a charge of failure to prevent it. The Ministry of Justice have published Guidance on “adequate procedures”, as required under Section 9 of the Act, and also a useful “quick start guidance” on what is required. Copies are available from justice.gov.uk/guidance/making-and-reviewing-the-law/bribery.htm.

In addition to advice on anti-bribery procedures, these also assist in the interpretation of such areas as hospitality and other promotional expenditure (allowed, where reasonable) and facilitation payments (will be bribes, unless required by law).

The guidance on adequate procedures is based on six principles:

  • Proportionality – procedures should be proportionate to the risks of bribery
  • Top level commitment
  • Risk assessment
  • Due diligence – mainly on those engaged to provide services on the company’s behalf – such as employees and agents
  • Communication – of the policies and procedures to employees agents and other relevant people
  • Monitoring and Review – to ensure the procedures are up-to-date and working effectively
Offences by senior officers

If one of the bribery offences has been committed by a body corporate or partnership, any director, manager, secretary or similar officer of the entity will also be guilty of the same offence, if it was committed with that person’s consent or connivance.

This may be a particular risk for persons with responsibilities (such as many finance directors) for maintaining systems of internal control, including those which might be introduced as “adequate procedures” for the prevention of bribery. 

The Bribery Act 2010

Details of the Bribery Act 2010, including core offences of paying or receiving a bribe; bribery of a foreign public official; corporate offence of failure to prevent bribery; offences by senior officers and enforcement of the Act.

The Bribery Act 2010

The Bribery Act was one of the final pieces of legislation to be passed before the general election in May 2010. It has important implications for all entities formed or doing business in the UK, especially those involved in international trade of any kind.

The Act completes the UK’s implementation of the OECD Conventionon the Bribery of Foreign Public Officials, as well as bringing domestic anti-bribery legislation up to date.

The Act came fully into force on 1 July 2011.

Core offences of paying or receiving a bribe

The Bribery Act goes back to first principles in addressing the damage caused by bribery, in a clear, logical and effective way.

UK residents/citizens

Any UK resident or citizen can be guilty of paying or receiving a bribe, whether the recipient is in the public or private sector, whether any part of the transaction takes place in the UK, and whether or not the bribe is paid directly or indirectly.

Definition of bribery

Bribery is defined in terms of an intention to encourage or induce “improper performance” by any person, in breach of any duty or expectation of trust or impartiality. Small bribes are not excluded, any more than pilfering is excluded from the definition of theft, but tips to reward good performance are acceptable, if no improper performance is in question.

Relevant function

A bribe can be paid in relation to any “relevant function” – which could be a function of a public nature; one performed in connection with business or employment; or any activity performed by or on behalf of a body of persons, whether corporate or unincorporated.

Improper performance

Improper performance will be judged in accordance with what a reasonable person in the UK would expect, in relation to the function or activity concerned. This test applies, even if no part of the function or activity took place in the UK, and where local custom is very different unless permitted or required by “written law” in the jurisdiction concerned.

What is 'written law'?

Written law is that contained in a written constitution, made under any legislation applicable to that country, or contained in a published judicial decision.

Bribery of foreign public officials

An additional specific offence of bribing a foreign public official has been added, to ensure complete implementation of the OECD Convention.

For this offence to be committed, it is not necessary to show improper performance by the official concerned, but merely that the bribe had been paid to a person in their capacity as an official of a foreign Government or international organisation with the intention to obtain or retain business or business advantage.

Again, no offence is committed, in accordance with foreign written law.

Corporate offence of failure to prevent bribery

Companies and partnerships can themselves commit the criminal offence of failing to prevent bribes being paid on their behalf – punishable by unlimited fines. Again, the offence is widely drawn, with not just bribes paid by employees being in question, but bribes paid by any person who performs services on behalf of the organisation. This is specifically likely to include employees, agents or subsidiaries, but may include any other person.

Adequate procedures

Having “adequate procedures” for the prevention of bribery will be a defence, to a charge of failure to prevent it. The Ministry of Justice have published Guidance on “adequate procedures”, as required under Section 9 of the Act, and also a useful “quick start guidance” on what is required. Copies are available from http://www.justice.gov.uk/guidance/making-and-reviewing-the-law/bribery.htm.

In addition to advice on anti-bribery procedures, these also assist in the interpretation of such areas as hospitality and other promotional expenditure (allowed, where reasonable) and facilitation payments (will be bribes, unless required by law).

The guidance on adequate procedures is based on six principles:

  • Proportionality – procedures should be proportionate to the risks of bribery
  • Top level commitment
  • Risk assessment
  • Due diligence – mainly on those engaged to provide services on the company’s behalf – such as employees and agents
  • Communication – of the policies and procedures to employees agents and other relevant people
  • Monitoring and Review – to ensure the procedures are up-to-date and working effectively

Offences by senior officers

If one of the bribery offences has been committed by a body corporate or partnership, any director, manager, secretary or similar officer of the entity will also be guilty of the same offence, if it was committed with that person’s consent or connivance.

This may be a particular risk for persons with responsibilities (such as finance directors) for maintaining systems of internal control, including those which might be introduced as “adequate procedures” for the prevention of bribery.

Implementing 'adequate procedures'

Commercial organisations are strongly recommended to implement anti-bribery procedures in accordance with the guidance issued by the Ministry of Justice.

Training and control of sales agents / third parties

Training of, and controls over, sales agents and other third parties carrying out services for the company are now essential in any circumstances where there is a significant risk of bribes being paid for the benefit of the organisation.

Joint ventures

Joint ventures and similar arrangements not under the total control of the company, but which may carry out services for it, also need to be reviewed to ensure they have procedures to ensure they do not pay bribes.

Ethical business practice

Bribery prevention is clearly a part of good ethical business practice, and of key importance to all professionals.

In some ways, such as the failure to tolerate facilitation payments, the UK legislation goes further than other laws, including the US Foreign Corrupt Practices Act.

Most international firms will need to be fully compliant with both, as well as those of any other jurisdictions where business is done.

Transacting Business Overseas

An ICAEW briefing paper which highlights the implications of the UK Bribery Act 2010 when working outside the UK, offering a series of practical steps that can be taken to mitigate the risk of falling foul of the Act. Published in July 2014