I have advised a number of my corporate clients that due to the recent introduction of new legislation that it is important to ensure that they have a look at the general housekeeping of their company and in particular in relation to the Bribery Act 2010 (Bribery Act).
SMEs and new start ups tend to prioritise about the legal documentation that they need to have in place on the basis of cost. I have spoken to some of my clients that have recently set up new companies and business who are insistent that the Bribery Act doesn’t really effect them, they are small companies and its something they will consider in a few years when they are more established.
From a commercial point of view I can understand their reasoning, they know that they personally are not about to “bribe” anyone. However this is unfortunately a simplistic view of what is a fairly complex issue and could well end up becoming a false economy.
Under this new legislation, not only is a director liable for any of his own misdemeanours relating to bribery but the company is also liable for anyone it employs or indeed contracts with. The liability is very wide reaching. The Bribery Act has introduced a new offence for companies, “failing to prevent bribery.” A company would be guilty of this offence if an associated person who performs services on its behalf (whether employee, independent contractor, consultant etc) bribes another person in order to obtain or retain business for the company. “Bribe” is construed very widely and could be considered to be a Christmas gift for a client or a lavish weekend of corporate entertainment (unless it is considered to be bone fide and proportionate) as well as the more traditional idea of a bribe.
For a director or a company to plead ignorance is not a defence. The penalties are high and could include an unlimited fine or up to ten years imprisonment. A director could also face disqualification.
There is only one defence which is available and this is for the company to prove that it had adequate procedures in place which are specifically designed to try and ensure that staff, consultants, contractors etc were prevented from being involved in bribery. The Company must be able to prove that such procedures were in place. The government are cracking down on “bribery” and being a small company is certainly not a defence to not having these procedures in place.
In order to be able to fall under the adequate procedures defence at the very least, I would advise clients to have an up to date Bribery Act Policy in place and ensure that the top level of management of the company are involved with determining the procedures relating to anti bribery for the company. They must emphasise that the company will not accept bribery of any kind.
There should on a continuing basis be a risk assessment of the company and its procedures to ensure that there is no issue relating to bribery. All staff should be advised and trained in respect of the company’s anti bribery policies and procedures. The company could also considering monitoring and reviewing procedures designed to prevent bribery and making changes and improvements if required.
All external contracts should now contain anti bribery provisions and refer to the company’s anti bribery policy.
Darlingtons can review your current contracts, policies and procedures or indeed draft these on your behalf to ensure compliance. Get in touch with me for further information or costings.
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