The wait is over. The Ministry of Justice (MOJ) has today published the long awaited guidance for commercial organisations on procedures that they can put into place to prevent bribery. The following documents were made available on the MOJ website this morning:
In addition, the foreword to the guidance clarifies that the Act will come into force on 1 July 2011.
No doubt the guidance will generate plenty of commentary but, essentially, it relates to section 7 of the Act. Section 7 provides that a relevant commercial organisation is guilty of an offence if a person associated with such organisation bribes another person intending to obtain or retain:
- business for such organisation; or
- an advantage in the conduct of business for such organisation.
A person guilty of an offence under section 7 is liable on conviction on indictment to a fine. The thing to note is that it is a defence for the commercial organisation to prove that it had in place adequate procedures designed to prevent persons associated with the organisation from undertaking such conduct.
Given the wide scope of the Act, it would no doubt raise much speculation on what constituted adequate procedures for these purposes. The Act addresses this by mandating the Secretary of State to publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing. It is no wonder that the business community was keen to get its hands on the guidance.
Among other things, the guidance states that in creating and implementing procedures to prevent bribery, commercial organisations should be mindful of the following principles:
- Proportionate procedures: 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 commercial organisation’s activities. They are also clear, practical, accessible, effectively implemented and enforced.
- Top-level commitment: The top-level management of a commercial organisation (be it a board of directors, the owners or any other equivalent body or person) are committed to preventing bribery by persons associated with it. They foster a culture within the organisation in which bribery is never acceptable.
- Risk Assessment: The commercial organisation assesses the nature and extent of its exposure to potential external and internal risks of bribery on its behalf by persons associated with it. The assessment is periodic, informed and documented.
- Due diligence: The commercial organisation applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organisation, in order to mitigate identified bribery risks.
- Communication (including training): The commercial organisation seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces.
- Monitoring and review: The commercial organisation monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.
Clearly, this is a principles-based approach rather than a rules-based approach which sets out high-level outcomes but gives commercial organisations the flexibility in how to achieve those outcomes. It will be interesting to see the way in which different organisations interpret the guidance in drafting their anticorruption policies and procedures.
I suppose the efficacy of the guidance could be judged on the workload of the Serious Fraud Office (SFO), one of the bodies whose consent is required before proceedings can be instituted under the Act, following the July implementation of the Act. Stay tuned for further insight later in the year from Carol Welu, a partner in our London office, who will be on the panel with the head of the SFO at the American Bar Association (ABA) Fall Meeting in Dublin.