Williams, Pearce, Leist and Corn in demand to herald in the Bribery Act- Adequate Procedures a practical approach!
4th July 2011
Fulcrum Partners have been fully engaged with both clients and the lecture circuit as the Bribery Act became law. Ib=van Pearce and David Williams spoke last week at the Sweet and Maxwell Bribery Act conference in central London, also speak were Vivian Robinson QC (SFO General Counsel) and Jeremy Summers (Partner at Russell Jones and Walker) A paper on Adequate Procedures produced by Ivan and Jeremy can be downloaded from this news feed, see the link below.
The number of speaking engagements gathered extraordinary momentum prior to the 1st July deadline. The interest expressed by UK business in this ground breaking piece of legislation is phenomenal and reflects the serious manner it is being treated by corporates. The S.7 offence and compliance with adequate procedures continues to dominate and Fulcrum have found the practical expertise in developing, delivering and advising on this particular area for UK and foreign corporates has proved invaluable. For more information contact Fulcrum directly, links to conference papers on a practical response to S.7 will follow here shortly.
German prosecutors have started the case against a former executive board member of Siemens.
At a Munich court, prosecutors on Tuesday accused Thomas Ganswindt of tax evasion and neglecting his supervisory duty by failing to halt a corruption scheme at Europe’s largest engineering group by sales.
See the Fulcrum Blog for more details.
Bribery Act Guidance Issued
5th April 2011
On 30th March 2011 Justice secretary Ken Clarke published the official Ministry of Justice guidance on the meaning of ‘adequate procedures’ (section 7 of the Bribery Act 2010). This starts the clock ticking. Companies now have three months to put in place adequate procedures to prevent persons associated with them from bribing another person on their behalf or risk prosecution. The Bribery Act will come into force on 1st July 2011.
Please click for a link to the Guidance and the Act.
The Justice Secretary’s foreword to the Guidance states that the core principle is “proportionality”. “Rest assured – no one wants to stop firms getting to know their clients by taking them to Wimbledon or the Grand Prix”. Issuing the Guidance, Ken Clarke said: “I have listened carefully to business representatives to ensure the Bribery Act is implemented fully and in a workable, common sense way” seeking to reassure business further he added: “We don’t have to decide between tackling corruption and supporting growth. Addressing bribery is good for business because it creates the conditions for free markets to flourish.”
Richard Alderman, Director of the Serious Fraud Office, signaled his organisation’s intention to deploy the act speaking of its “wide” scope. He added, “I want to see companies police themselves and develop an anti-corruption culture. I want to get on and investigate those companies that are putting our ethical UK businesses at disadvantage by offering bribes”.
Questions have been raised as to whether the SFO will have sufficient resource to take forward multiple large-scale international bribery investigations. Importantly, the Guidance does not put a financial figure on when a gift becomes a bribe and also stresses that the Act does not provide an exemption for any form of facilitation payment.
The Joint Prosecution Guidance issued by the DPP and the Director of the Serious Fraud Office reminds the business community that: ”Bribery is a serious offence. There is an inherent public interest in bribery being prosecuted in order to give practical effect to Parliament’s criminalisation of such behaviour.”
The joint guidance lists factors tending against prosecution including situations where:
The court is likely to impose only a nominal penalty ;
The harm can be described as minor and was the result of a single incident;
There has been a genuinely proactive approach involving self-reporting and remedial action.
The Joint Guidance highlights one policy objective behind the legislation.
“Prevention of bribery of foreign public officials is a significant policy aspect of the Act”
The Government’s Guidance confirms that companies and organisations are being encouraged to self report and take robust, positive action from the top down, to prevent bribery and corruption by communicating a commitment to zero tolerance to bribery throughout its organisation.
Adequate bribery prevention procedures require an initial risk assessment as a necessary first step. The level of the risk will vary with the type and nature of the persons associated with it and but, externally, it is likely to fall into five broad risk groups: country, sectoral, transaction, business opportunity and business partnership.
The internal and external bribery prevention procedures should seek to ensure there is a practical and realistic means of achieving the organisation’s stated policy objectives across the company. The Government realises that changes in dealings with existing associated persons may take time and may depend on the level of control and practicability of achieving change but it is clear that steps to influence change are to be encouraged.
The Government expects training, which is proportionate to the risk the company faces, should form part of this commitment to establish an anti bribery culture and could be mandatory for new employees or for agents on a weighted risk basis. Once the culture is established, it should be demonstrated that its procedures are monitored, reviewed and where necessary improved.
The Guidance encourages organisations to consider seeking some form of external verification or assurance of the effectiveness of its anti -bribery procedures, but such certification may not necessarily mean that the company has established its adequate procedures defence to a charge under section 7 of the Bribery Act.
This area of new law is likely to be extremely fact sensitive and only when cases are dealt with by the courts, following decisions taken to prosecute, will there be a clearer picture of its application.
Meanwhile, organisations need to familiarise themselves with the checklist below of principles underpinning the legislation and begin to plan accordingly.
1) Proportionate procedures: a commercial organisation’s procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces.
2) Top level commitment: Top level management must foster a culture within the organisation in which bribery is never acceptable.
3) Risk assessment: The commercial organisation must assess the nature and extent of its exposure to potential risks of bribery on its behalf by persons associated with it.
4) Due Diligence: The commercial organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation.
5) Communication (including training): bribery prevention policies and procedures must be embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces.
6) Monitoring and review: The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.
For advice with regard to the impact of the Act and the Guidance, please contact us at or by telephone on 020 7186 0420.
The Government Announce Surprise Bribery Act Review!
On Thursday (13/1/11), the Government confirmed that the Bribery Act will be assessed as part of a Whitehall drive to ease regulatory burdens on business.
The shock announcement comes amid growing reports and warnings in the media about the consequences of the Act which is already on the Statute Book awaiting secondary legislation bringing it in to force. The review of legislation at this stage is unprecedented.
This legislation has been long in gestation and began life following the UK's ratification in 1997 of the OECD's Anti Bribery Convention.
The Coalition's Growth Review – jointly run by the Treasury and the Department for Business – will now review the act to see what scope there is for softening its impact.
The legislation introduces the new offence to "offer, promise or give a financial advantage or other advantage, to another person to bring about improper performance of a relevant function or an activity, or to reward a person for the improper performance of a relevant function or an activity".
Companies face a strict liability offence that might lead to prosecution for failing to prevent bribery in their firms or by associated parties, such as overseas sales agents unless adequate procedures are in place to prevent it occurring.
Fulcrum on the International Stage
Helen Garlick was invited to attend a two day meeting in Cape Town between 11 and 12 November as a guest of the National Prosecuting Authority of South Africa. The theme of the meeting was Prosecuting Grand Corruption; An International Perspective. The other invited partcipants were Fabio de Pasquale from Milan, the prosecutor of the Berlusconi cases, Juan Carlos de Cubillo of Costa Rica, who prosecuted and secured the recent conviction of ex President Calderon and Alexius Nampota, the Director of the Anti Corruption Bureau of. Malawi
The Bribery Act 2010
20/10/10
The Bribery Act 2010 (the Act) received Royal Assent on 8 April 2010. The purpose of the Act is to reform the criminal law of bribery to provide for a new consolidated scheme of bribery offences to cover bribery both in the United Kingdom (UK) and abroad.
The Act replaces the offences at common law and under the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Act 1906 and the Prevention of Corruption Act 1916 with two general offences. The first offence covers the offering, promising or giving of an advantage (broadly, offences of bribing another person). The second offence deals with the requesting, agreeing to receive or accepting of an advantage (broadly, offences of being bribed). The formulation of these two offences abandons the agent/principal relationship on which the previous law was based in favour of a model based on an intention to induce improper conduct. The Act also creates a discrete offence of bribery of a foreign public official and a new offence where a commercial organisation fails to prevent bribery.
The other main provisions of the Act include:
replacing the requirement for the Attorney General’s consent to prosecute a bribery offence with a requirement that the offences in the Act may only be instituted by, or with the consent of, the Director of the relevant prosecuting authority;
a maximum penalty of 10 years imprisonment for all the offences, except the offence relating to commercial organisations, which will carry an unlimited fine;
extra-territorial jurisdiction to prosecute bribery committed abroad by persons ordinarily resident in the UK, as well as UK nationals and UK corporate bodies;
a defence for conduct that would constitute a bribery offence where the conduct was necessary for the proper exercise of any function of the intelligence services or the armed forces engaged on active service.
