Talking Point: The clock is ticking
In a little over five weeks the Bribery Act 2010 will take effect and the companies need to ensure that they are ready when the act is implemented. That means having the right policies and procedures in place to avoid bribery and making sure that these are properly implemented. Employees need to be trained as does everyone associated with the company. It is also advisable for organisations to examine their current approach to hospitality.
It is very important for companies to be aware of all of corruption risks and the potential impact the act will have on their business, both in the UK and overseas. Prosecutors will take a dim view of those who turn a blind eye or fail to take compliance seriously.
Companies must take steps to assess and mitigate their risks by ensuring that an effective anti-bribery and corruption programme is in place. The Ministry of Justice has recently issued its final guidance about procedures which commercial organisations need to put in place to prevent persons associated with them from bribing and this guidance clearly demonstrates that a 'one size fits all' approach to anti-corruption compliance will not suffice.
A risk-based approach should be at the heart of any good compliance system. The Ministry of Justice guidance identifies the following six general compliance principles that should be applied by organisations: proportionate procedures; top level commitment; risk assessment; due diligence; communication and training; and monitoring and review. The guidance has been amended in an effort to make it more user-friendly and it is clear that the guidance has also been redrafted to appear to be less prescriptive and send a message that procedures should be proportionate to an organisation's circumstances.
Take corporate hospitality, the guidance is clear that bona fide hospitality that seeks to improve the image of a commercial organisation to present products and services or establish cordial relations is recognised as an established and important part of doing business. There appears to be no attempt to criminalise such activity. However, the guidance does remind organisations that hospitality can still constitute a bribe. Organisations are therefore advised to carefully consider the hospitality they offer and to establish and properly disseminate appropriate procedures to ensure compliance.
Every company should ensure that anti-bribery policies and procedures are in place which are fit for purpose as without them there will be no prospect of defending a charge of failing to prevent bribery. A compliance programme based solely of the US Foreign Corrupt Practices Act 1977 will no longer be good enough.
Board and senior management teams should ensure that internal procedures are effective by carrying out an anti-corruption compliance risk assessment and steps should be taken to mitigate any risks as a matter of urgency.
James Lowe is an associate in DLA Piper’s regulatory team.
