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The Bribery Act 2010 - What does it mean for your business?


The UK Bribery Act came into force in April 2010. This legislation is even more far reaching than the Foreign Corrupt Practices Act (FCPA) in the US. It covers the activities of UK businesses anywhere in world and the activities of foreign-based companies that operate in the UK and makes no exception for ‘grease’ payments: those cultural payments that the FCPA does allow.

There are significant responsibilities resultant from the Bribery Act on all companies, including “failure to prevent” bribery becoming a crime. This is a major step forward in anti-bribery and corruption prevention culturally, passing responsibility to companies to implement their own anti-bribery culture, and implementing a zero tolerance approach to bribery and corruption in the worldwide business activities of all companies that operate in the UK.

The Bribery Act expects organisations to put in place “adequate procedures” to put a stop to corruption, which will essentially act as their defence to any “failure to prevent” bribery charge. There will be an announcement from the Secretary of State before the autumn of this year on what is required to be adequate, but this is not expected to be prescriptive or in a checklist format. As such, the responsibility is on organisations to design their own anti-bribery and corruption programmes.

Another major addition to the Bribery Act is that companies are now responsible for “associated persons”. This means third parties, partners, joint ventures, agents and everyone who acts for an organisation, so it is a very broad definition covering all relationships. As a result of this, organisations will have to look at their worldwide operations and undertake due diligence on all relationships they have in place, and any new ones they implement.

The culture of punishments in relation to this new legislation is expected to punish breaches severely. For example, AON were fined £5.25 million by the UK Financial Services Authority for inadequate internal control systems even prior to this legislation, and Siemens were fined nearly £900 million by US authorities for their bribery and corruption scandal.

The onus is on organisations to act sooner rather than later to put their houses in order and genuinely change the culture of their organisations. As a minimum, they need either new or re-written procedures, an overarching Anti-Bribery and Corruption Strategy, a training programme, a consistent approach and a robust recording system for their worldwide activities and use of third parties. In addition, organisations need to revise their gifts and hospitality policies as well as their approach to political and charitable contributions and those facilitation payments acceptable until now in certain business cultures around the world.

For further information and advice relating to the Bribery Act 2010 please contact BTG Intelligence.


About the author

Julie Palmer

Regional Managing Partner

Meet our Team of Experts

Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.

Julie is a member of the Insolvency Practitioners Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.

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