THE UK BRIBERY ACT 2010:
Recent anti-money laundering regulations, corporate governance and other anti-corruption legislation in the UK and USA have all been designed to prevent and enforce against fraud and corruption. From 1st July 2011, the UK Bribery Act 2010 will also come into force. Its aim is to help combat bribery involving British Citizens, UK registered companies and those doing business with and for UK companies, here and overseas.
The Bribery Act 2010 creates several offences against those who offer or receive a bribe, those who bribe a Foreign Public Official; and those who fail to prevent a bribe being paid on an organisation’s behalf. The Act defines bribery as "giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so."
The Act recognises that no bribery prevention regime will be capable of preventing all incidents of bribery; however it "seeks to create clarity and promotes organisations doing business competitively and fairly."
To help organisations comply with the Act, the Ministry of Justice has published Guidance about procedures which should be implemented to prevent individuals from bribing others; this can be found at www.justice.gov.uk.
The Guidance stipulates that organisations need to implement and demonstrate they have adequate procedures in place to prevent bribery, as this might be their only defence if faced with prosecution. The onus will very much remain on the organisation.
Many organisations in the UK will face little or no risk of bribery, especially if their business is conducted primarily in the UK; however, if you have subsidiaries outside the UK, or conduct business with international partners, the risks of bribery are likely to be greater.
The Guidance recognises these factors and one of its core principles is proportionality and advises: "A commercial organisation’s procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the organisation’s activities."
The Guidance advises organisations to adopt a risk-based approach to managing bribery risks as the bribery threat can vary from one organisation to another, as do challenging jurisdictions, different industry sectors, business partners and transactions.
With this proportionality in mind, the Guidance is designed and formulated around six principles.
- Proportionality
- Top Level Commitment
- Risk Assessment
- Due Diligence
- Communication
- Monitoring and Review
The following are the Guidance Principles summarised by the Ministry of Justice.
Proportionality:
The level of prevention measures you implement should be proportionate to the risks your organisation faces and to the size and structure of your business. If your organisation is large, or if you are operating in an overseas market where bribery is known to be commonplace, then more bribery prevention measures will be required compared to what you might do if your organisation is small, or is operating in markets where bribery is not common.
Top Level Commitment:
Senior management of an organisation are in the best position to ensure their organisation conducts business without bribery. If you are running a business, you will want to demonstrate that you have been active in making sure that the people who do business for you understand that you do not tolerate bribery.
Risk Assessment:
Assess the nature and extent of your exposure to potential external and internal risks of bribery that you are likely to face. Research the markets you operate in and the people you deal with, especially if you are entering into new business arrangements or new markets overseas.
Due Diligence:
Are the individuals representing your company exactly who they say they are? Are they anti-bribery compliant or do they have a history of dubious dealings? Knowing who you are dealing with can help to protect your organisation, what you don’t know – might hurt. You may therefore want to ask questions, verify the answers given and conduct your own background research before engaging others to represent you in business dealings.
Communication:
Communicating your policies and procedures through training and raising awareness to staff and to others who will perform services for you helps to deter bribery. Make clear the basis on which your organisation does business.
Monitoring and Review:
The risks you face and the effectiveness of your procedures may change over time. You should keep an eye on the anti-bribery steps you have taken so that they remain up to date with any changes in the bribery risks you face when, for example, you enter new markets.
So What Happens Next?
The next few months will be a period of transition and review for most organisations. The prosecuting authorities such as the Serious Fraud Office have already recognised and made known that most organisations require some time to review and implement their anti-bribery strategies and policies. However, they do expect organisations that do not have an anti-bribery approach – to commit themselves to do so, now.
So How Can We Help?
As one of the UK’s premier investigation companies, Commercial Security International offers expert advice and support to prevent fraud and assist organisations to recover from fraudulent and criminal attack. As part of our investigation services, we regularly undertake global due diligence investigations into employees, senior management, vendors, brokers and agents. This assures our clients the integrity of the people and organisations that they employ or deal with; reducing the risk of losing stakeholder confidence, value and reputation; and now helps with anti-bribery prevention procedures.
Why Commercial Security International?
Our investigators have previously held senior positions in policing, fraud prevention, white collar crime investigation, or have developed skills in the corporate security sector. All provide expertise in confidential investigations, risk assessment, intelligence gathering and all aspects of corporate security. We support our clients through the investigative process, confidentially and discreetly, in the following areas:
- Fraud and White Collar Crime
- Bribery and Corruption
- Employee Defection
- Due Diligence
- Asset Profiling, Tracing and Recovery
- Intellectual Property Theft
- Surveillance
- Evidence Gathering
- Pre-Employment Screening
- Computer Forensic Support
Whatever the investigation, we deliver high quality and cost effective support. If you require further assistance with complying with the Bribery Act 2010, or have suspicions of fraud and want to resolve them professionally then please contact us on +44 (0) 20 7553 7960 or visit our web site at comsechq.com.
