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The Bribery Act 2010: What Employers Need to Know

13 June 2024

The Bribery Act 2010 was intended to respond to the threat bribery poses to democracy, economic progress in emerging economies and the operation of free markets. It created four criminal offences in relation to bribery: offences of what could be termed ‘active bribery’ (i.e. offering or giving a bribe) and ‘passive bribery’ (i.e. requesting or accepting a bribe), and two offences addressing commercial bribery, one of which is the offence of bribing a foreign public official for a business advantage, and the other is the offence of failure to prevent bribery on behalf of a commercial organisation.

The last of these is likely to be the most concerning to employers. While a company can be found directly guilty of having committed bribery, including bribing a foreign public official, these offences require active steps to have been taken, whereas organisations can be guilty of a failure to prevent bribery even when completely uninvolved in or unaware of bribery that has occurred. But what does a company have to do to be liable for a failure to prevent bribery, and how can employers manage the associated risks?

Failure of commercial organisations to prevent bribery

This offence is found in section 7 of the Act and makes a commercial organisation guilty of an offence if a person associated with the organisation bribes another person either 1) intending to obtain or retain business for the organisation, or 2) to obtain or retain a business advantage for the organisation.

A wide range of organisations fall within the scope of this section, including both bodies incorporated and partnerships formed in the UK which carry on a business either within or outside the UK, and bodies incorporated and partnerships formed anywhere which carry on a business in the UK.

For a person to qualify as ‘associated with’ an organisation, they must be someone who performs services for or on behalf of the organisation. This can be in any capacity, including as an employee. Indeed, while section 8(4) provides a context-based test to determine whether someone qualifies, section 8(5) of the Act specifically states that employees are presumed to qualify unless shown otherwise.

The penalty for a section 7 offence, should the organisation be convicted, is an unlimited fine.

Defences

There are several means by which a company can escape having committed this offence.

The associated person must themselves be capable of being found guilty of bribery for the organisation to be liable, though they do not need to have been prosecuted. This point is important, as the Act sets out various requirements for these offences to have been committed, some of which may not be met in circumstances which may appear questionable. For example, government guidance notes the difference between reasonable hospitality or promotional activity, which is permitted, and bribery. 

More important in terms of risk management, however, is the legislative defence to a section 7 offence, found in section 7(2). If a company can prove that it had in place adequate procedures designed to prevent those associated with it from undertaking the relevant conduct, then it will not be guilty of an offence. This is the essential point for employers, who will want to avoid inadvertently committing a bribery offence as a result of the actions of its employees.

There is significant government guidance on how an organisation can put in place ‘adequate’ procedures so as to prevent bribery being committed on its behalf, and the guidance lists six principles which should underlie anti-bribery procedures:

  • Proportionality: procedures should be proportionate to the risks an organisation faces, which may be influenced by factors such as the size of the organisation, the nature and complexity of its business, and the type of persons associated with it.
  • Top-level commitment: those at the top level of an organisation, such as the board of directors or owners, should foster a culture in which bribery is unacceptable.
  • Risk assessment: an organisation should assess the nature and extent of its risk exposure in a periodic, informed and documented way.
  • Due diligence: an organisation should undertake due diligence, informed by proportionality and risk assessment, in respect of those who perform services on its behalf.
  • Communication and training: an organisation should make sure its policies and procedures are understood throughout the organisation through internal and external communication, including training.
  • Monitoring and review: an organisation should monitor, review and improve its procedures when necessary.

Practical guidance for employers

The government guidance provides some concrete advice to employers.

In brief, it notes that bribery prevention policies are likely to contain certain key elements, such as:

  • The organisation's commitment to bribery prevention
  • Its general approach to mitigating specific risks, such as those associated with hospitality and promotional expenditure or political and charitable donations.
  • Its strategy to implement its policies. Any procedures put in place should be designed to mitigate both identified risks and deliberate unethical conduct. Such procedures might address topics such as:
    • Top-level managerial involvement
    • Risk assessment
    • Due diligence
    • Gifts, hospitality expenditure, donations and facilitation payments
    • Employment terms and conditions
    • Financial and commercial controls
    • Transparency
    • Enforcement and sanctions
    • Reporting bribery
    • Communication and training
    • Monitoring and review

Organisations are advised to effectively communicate top-level commitment to zero tolerance to bribery through statements which are likely to demonstrate, among other things:

  • Commitment to carrying out business fairly, openly and honestly
  • Zero tolerance towards bribery
  • The consequences of breaching the policy for various types of associated persons
  • Articulation of the business benefits of rejecting bribery
  • Reference to the range of anti-bribery procedures in place

Organisations should consider a broad range of risks in their risk assessments, such as risks associated with the countries and sectors the organisation works in, as well as the risks associated with particular types of transaction, business opportunities or business partnerships.

As an organisation’s employees are presumed to be associated persons, it would be appropriate to incorporate due diligence into recruitment and HR procedures relating to employees in high-risk posts. General training could be made mandatory for new employees as part of the induction process, and tailored training could be provided in proportion to the level of risk associated with a role.

Key takeaways

Employers should review their policies and procedures, including employment contracts and employee handbooks, disciplinary procedures, anti-bribery policies and whistleblowing policies, to ensure that these reflect the organisation’s commitment to anti-bribery. In particular, it should be confirmed that bribery is a disciplinary matter, with the potential consequences made clear in anti-bribery and disciplinary policies.

Employers should consider whether they need to introduce training or amend the training currently on offer, either for all employees or for those in high-risk roles. What level of training is appropriate will depend on the outcome of a full risk assessment, but should any employees be in higher risk roles, such as those involving business connections with foreign public officials, they should be given additional training and guidance.

Employers should also ensure that, if they have not done so already, they issue internal and external communications confirming a zero tolerance approach to anti-bribery.

This article is not intended as legal advice. If you want to better understand how you as an employer can protect yourself against committing a bribery offence, get in touch with us at the details below. 

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