Anti-bribery Procedures – Time for a Redraft

Government Rejects Lords’ call for clarification on corporate hospitality and the defence of ‘adequate procedures’.

The Bribery Act 2010 has now been in force for 8 years. Initially there were widespread fears that it would leave UK businesses at a disadvantage and that taking a business contact for dinner would be a criminal offence. Following calls to review the Act, especially from the SME sector, a Select Committee of the House of Lords published a ‘’scrutiny” report on the success of the legislation in March this year.  The report identified a number of areas for improvement and the Government has responded this summer but has declined to act on concerns about the difficulties that businesses face when selecting anti-bribery controls.

A review of the prosecutions for Bribery Act offences make it clear that individuals, SME’s and large businesses have all been affected. The Lords’ report makes several recommendations aimed at increasing the number of prosecutions, including better training for the Police and enhanced inter-agency co-operation. The number of prosecutions may well continue to rise.

Businesses that have found themselves embroiled in accusations of bribery, or who believe they are at risk, have a number of avenues they can pursue to avoid significant fines and penalties, including self-reporting and ‘deferred prosecution agreements’. In theory, however, the best option is to be able to show that ‘adequate procedures’ were in place to prevent bribery.

Developing adequate procedures which are also proportionate is a difficult exercise to get right. If procedures are too onerous, they won’t be implemented effectively but, on the other hand, the MoJ guidance has scant detail on specific procedures which might be considered to be proportionate, leading the Lords’ Select Committee to conclude:

‘The Ministry of Justice should, in consultation with representatives of the business community, and especially of SMEs, expand the section 9 Guidance to give more examples and to suggest procedures which, if adopted by SMEs, are likely to provide a good defence.’

Unfortunately the Government has rejected this recommendation, apparently on the basis of allowing business to take a flexible, non-prescriptive approach.

At Ashfords we have experience of helping clients to make the right choices, so their procedures are workable but also effective. Many off-the-peg Bribery Act Policies are both over-defensive in relation to corporate hospitality but also fail to identify and control high-risk scenarios in a proportionate way: the worst of all worlds.

On this issue, the Select Committee commented:

‘…initially the Act may have had an overly deterrent effect. The Ministry of Justice should consider adding to the Guidance clearer examples of what might constitute acceptable corporate hospitality.’

This recommendation also has been declined.

The selection of appropriate control measures can be a time-consuming and difficult process. Ashfords can give you a head start in the process by providing an easy-to follow system which allows you to identify risks and select from a suite of control measures each time you review and update your policy.  

Ashfords can help you set up such a system quickly and also help you with related steps such as carrying out due diligence on your associated persons (agents, JV partners etc.) who are capable of triggering liability for your business.

If you’d like to discuss your business’s approach to anti-bribery procedures, please contact the Risk and Regulation Team.