Bribery

Bribery Act 2010 and small to medium sized business

The Bribery Act has created a lot of press and will come into force in April 2011. The whole issue of bribery and corruption is very topical and very political at the moment. The MP expenses scandal and world cup bid are just 2 recent examples. Many small to medium sized business clients we have spoken with consider that this Act is only aimed at big business and whilst it may be the case that such businesses will be the main targets, the penalties and reputational risks for any business mean that simply ignoring this legislation is dangerous.

The main reason for the risk is that the Act creates a new, strict liability corporate offence of failing to prevent bribery, which applies to all businesses, large or small. The ambit of the Act also includes businesses which are either incorporated in the UK or carry on business in the UK.

Practical steps needed to comply with the Bribery Act

• Business owners need to ensure they have documented and adequate policies and procedures to prevent bribery
• Business should designate a senior person responsible for anti-bribery and corruption procedures and for ongoing review
• Risk assessments should be conducted at regular intervals
• Employment contracts may need to be varied to include employee obligations and sanctions regarding acceptable and unacceptable behaviour    for bribes, hospitality and gifts
• Ensure you have a whistle blowing policy and this may need to be amended
• Some form of due diligence is required for suppliers and contracts to check there is nothing underhand and that there are no “red flags” for doing business with them (this is good business practice anyway)
• Financial controls should be in place to minimise the possibility of corrupt activities.

The penalties for the corporate offence of failing to prevent bribery are severe. These include unlimited fines and being debarred from applying for Government contracts.

How can we help ?

We recognise that business conditions for many businesses are tough already and that this type of legislation can be viewed as yet more bureaucracy which costs money and creates no value for business. However, as stated above, it would be dangerous to simply ignore the legislation and there are some benefits from complying with it, both in general business risk mitigation but also in enhancing reputation and credibility. As with all legal matters, we approach the services we can offer in this area on a cost/benefit basis, so please contact us to discuss the ways in which we can assist.

Additional corporate law advice is available on our microsite and our Watford specific site.