The Bribery Act 2010

The Bribery Act 2010 (the Act) came into force on 1 July 2011 and provides a comprehensive scheme of bribery offences that will apply to private-sector bribery, as well as officials of state-owned companies. These offences apply to the activities of UK companies and individuals anywhere in the world, and to foreign companies where part of the bribery occurs in the UK.

Acts that will constitute offences include someone offering a financial or other advantage in order to get another to act in an impartial way (this includes a specific offence of Bribing a Foreign Public Official that is stricter than the general bribery offence), or a person acting in an improper manner by taking a financial or other advantage to allow another to gain.

These offences are not new however; the Act does create a new corporate offence where a person associated with a company anywhere in the world bribes a person with the intention of obtaining an advantage for the company. The only defence to the corporate offence is for a company to show it has “adequate procedures” in place to prevent bribery. The term “adequate” is not defined in the Act and is likely to be interpreted more strictly with larger organisations facing a higher threshold than a small company.

A company can face unlimited fines if found guilty of any of the offences under the Act, with turnover generated by the deal being potentially confiscated. Further, a director who is found guilty of active or passive bribery or of bribing a foreign public official can be imprisoned for up to ten years.

Bona fide hospitality or other business expenditures that seek to improve the image of a company or establish cordial relations are not prohibited by the Act. However, it is essential that a company’s anti-corruption procedures are carefully designed and implemented and that all employees are made aware of the penalties for breaching them.