In a recent edition of our Legal News, we highlighted the implications of the UK’s Bribery Act 2010 for Irish commercial organisations which carry on business, or part of a business, in the UK.

Among the new offences under the Act is the failure of a commercial organisation to prevent bribery.  This offence applies where a person “associated” with an organisation (including employees, agents, subsidiaries and other third parties acting on the organisation’s behalf) bribes another to gain business for the organisation.  The only defence to this charge is that the organisation had “adequate procedures” in place to prevent persons associated with it from committing bribery. 

The UK Ministry of Justice (“MoJ”) recently published a consultation paper setting out proposed guidance on what constitutes “adequate procedures” to prevent bribery.  While the draft guidance acknowledges that procedures will vary from one organisation to the next depending on their size, sector, etc., it sets out six principles which are generally applicable to all organisations:

• Risk Assessment – the organisation must keep up-to-date with bribery risks in its sector / market;
• Top Level Commitment – it must establish an anti-bribery culture across the organisation, and regularly make it clear to staff and business partners that bribery is unacceptable;
• Due Diligence – it must be confident that its business relationships are transparent and ethical;
• Clear, Practical and Accessible Policies and Procedures – its policies must apply to all employees and business partners under its effective control, and cover all relevant risks;
• Effective Implementation – anti-bribery must be embedded in its internal controls, policies, operations, training etc.; and
• Monitoring and Review – transparent auditing and financial controls which are sensitive to bribery must be in place, and it should consider how regularly its policies are to be reviewed (and whether external review is needed).

It is expected that finalised guidance will be issued by the UK Government early in 2011, and that the Act will come into force in April 2011.  It is critical that organisations carrying on business in the UK review the adequacy of their anti-bribery procedures in light of the principles set out in the final MoJ guidance.

This article has been authored by Joanne Conlon.