What is the Bribery Act and why is it important to you?

The Bribery Act was passed on 8 April 2010. It is of fundamental importance to all commercial organisations that are either registered in the UK or operate in the UK. It is likely to come into force with effect from October 2010.

The Act aims to reform the criminal law to provide a new, modern and comprehensive scheme of bribery offences to enable courts and prosecutors to respond more effectively to bribery at home or abroad.

It introduces a new strict liability offence where a commercial organisation fails to prevent bribery by one of its employees, agents or persons connected with it but it will be a defence to show that the organisation had in place adequate proceedings designed to prevent such bribery. In effect, it introduces a requirement on all businesses to have and operate an adequate anti-bribery policy. This will need to address extremes, from the prohibition of payment of bribes to public officials to obtain contracts, through to what constitutes an appropriate business entertainment expense. The policy will also need to address the keeping of appropriate business records in relation to such matters. The Government is expected to provide guidance before October 2010 as to what would constitute an adequate policy.

The commercial organisation offence will carry an unlimited fine. It is therefore possible that a conviction could result in a company being ordered to pay a fine equal to the entire benefit that it obtained from a transaction that was tainted by the corrupt act – a complete disgorgement of profits – which could lead to fines of millions of pound. The recent settlement of allegations by the Serious Fraud Office that BAE had been guilty of corruption led to a payment by BAE to the SFO of £30 million as well as a payment of €400 million to the US Department of Justice.

The attitude of UK prosecutors is also changing and the Director of the SFO has made it clear that investigation and prosecution of corporate corruption is high on the SFO's agenda. On 24 March 2010, the SFO arrested three directors of Alstom in the UK on suspicion of bribery and corruption offences. On 26 March 2010, Innospec Limited (the British arm of an international chemical company) was fined £8.3m in the Crown Court following an SFO investigation in relation to corrupt payments made to officials in Indonesia. Its parent company was also fined $14.1m in the US following a Department of Justice investigation under the US Foreign Corrupt Practices Act.

What can Taylor Wessing do?

Taylor Wessing’s Corruption and Ethics Practice Group is drawn from fee-earners from across the firm, including members of our Fraud/Corruption, Employment and Corporate groups. The Corruption and Ethics Practice Group can present the following services to you:

• Training on the Bribery Act to highlight the issues and need for action now – this training is intended to involve a short presentation to management and a discussion to identify key issues for you.
• Preparation of an anti-corruption policy (typically as part of a wider ethics policy).
• Where required, revision of senior or certain employment contracts to include strict provisions against conflict of interest/personal interest in transactions.
• A review of your business to identify red-flags that need to be addressed and creating a remedial project plan to review with you.
• A corruption “red-flag” review as part of a due diligence on business acquisitions.
• Investigate potential corruption incidents and advise on appropriate steps to be taken including possible self-reporting to government authorities.

Where appropriate, some of the above services will involve working with accountants and we have good relationships with several leading firms for this purpose.

If you would like more information on any of the above then please contact a member of Taylor Wessing Corruption and Ethics Practice Group.

Lawyers David de Ferrars, Andrew Granger, Sean Nesbitt, Heidi Wales